Thoughts and Insights by Michael Gregory

Valuation

A C-clamp squeezing a wallet with dollar bills in it
June 27th, 2022

Is the IRS Job Aid on Reasonable Compensation still relevant?

The IRS valuers identified reasonable compensation as one of the top issues for audit. Differences of opinion by valuers in the private sector and IRS valuers could lead to conflict and disputes on examination, leading to Appeals, and potentially to litigation. This commentary defines reasonable compensation, introduces the IRS Job Aid and Appendix, provides links to some recent IRS papers related to reasonable compensation, introduces how various levels at the IRS look at the issue, provides links to relevant court cases and key factors for consideration from those court cases, and provides a source for contemporary commentary on this topic.

Two opposite pictorial views of positive and negative appear to be banging into each other while words like bias, antagonism and others are in the background
May 23rd, 2022

Business valuation experts are biased and so are you – so what do you do?

Four experts in behavioral finance conducted extensive research and wrote an article entitled, “Are Business Valuators Biased? A Psychological Perspective on the Causes of Valuation Disputes.”  This article explores the insights gained from their research. In short, yes, business valuers are biased on at least three levels. When given a number from a client as to what the client thinks, that is an “anchor” bias or when knowing the client is a buyer or seller that is called engagement bias to have a lower or higher number. Cognitive bias impacts the number supplied by the business valuer. When considering whether the business valuer is biased or not 58.7% believed the other side was biased and 25.1% believed that they were biased. Your bias can hurt or harm you during a negotiation on your conclusion of value too. Using your bias can be an advantage in a negotiation sometimes too.

Young lady in front of laptop biting her pencil
February 7th, 2022

Stress, health, aging, and conflict what do they have to do with each other and business valuation?

In many professions tight deadlines, being an expert witness, litigation, and other stressors impact your every day. The questions are what does this do to with your health? How does this impact your aging? What about conflicts at work? After some research in these areas here are some great ideas to help you with these issues and a personal insight related to business valuers.

Four individuals online on one screen being able to see each other live
January 24th, 2022

This is why you want to try online or virtual mediation

Very simply mediation is a process whereby a third party assists the parties to develop a resolution that both parties can agree upon. The mediator is a trained neutral in contention. The mediator helps the parties expand their horizons from looking at the problem with a narrow focus and instead helps the parties look at the issues more broadly. This helps the parties develop a solution that both parties either like or can live with going forward. Advantages have been found with virtual mediation over face-to-face mediations. This article explores the advantages of using online or virtual mediation.

Mediator at head of table with two participants on each side smiling after a successful mediation
January 17th, 2022

Mediation and conflict resolution with business valuations

This commentary introduces you to alternative dispute resolution and then focuses on mediation and the application of mediation to resolve conflicts. Mediation can save significant time, money, resources, emotional toil, and physical toil on the participants leading to closure. Mediation is confidential, the parties make the decisions, the mediator remains neutral relative to the parties, if there is an agreement, the mediator writes up what the parties agreed to for closure. The terms of the agreement can be followed up legally after the session to ensure compliance with applicable laws.

October 22nd, 2021

How do you make uncomfortable situations comfortable?

We all must deal with people and stressful situations at work, home, and life.

Older gentleman holding a picture of himself, son, and granchilc
July 14th, 2021

Addressing family strife with the transfer of the family business

As a qualified mediator that focuses on business valuation issues, I have been brought in many times to assist with conflicts associated with business valuation and family succession issues, when things do not necessarily go as planned. This article focuses on common problems and ways in which a qualified neutral familiar with business valuation can help the parties through this emotional and stressful time. Various parties offer expertise to assist with the process, but in the end a qualified neutral familiar with this process, valuation, and mediation can help resolve painful issues timely with far less emotional and physical resources expended.

The word "We" over the word "Me"
January 2nd, 2021

Want to increase productivity and growth in 2021? Collaborate even better with others.

Exploring ideas from 2020 blogs from mikegreg.com on collaboration, there are 31 blogs that cover various elements of collaboration. To start 2021 off right for you I have organized these into various categories that will help you to be more productive and enhance growth by being more collaborative with others. 

Man in suit pointing at clear screen where the button he is pointing at says audit
August 7th, 2020

Begin an Audit with the IRS with Collaboration

When you think of collaboration quite likely the IRS does not come to mind. Rather when you hear the term IRS you are not thinking of working together. Instead the thought of an IRS audit likely brings forth thoughts of anxiety, I don’t have time for this, why me and now what? With that in mind I thought explaining some basic tips after receiving an audit letter from the IRS may help. Especially as these tips relate to The Collaboration Effect. After all the IRS are people too.

IRS symbol with IRS - blue background and white symbol and lettering
August 3rd, 2020

IRS, Business Valuers, Adjustments and Preventative Approaches

On July 1, 2020 it was my pleasure to be interviewed by Melissa Gragg, CVA, MAFF, CDFA and Managing Partner at Bridge Valuation Partners, LLC. This 84 minute podcast is packed many ideas of how to avoid and what to do if audited by the IRS on an estate or gift tax return. For business valuers this commentary focuses on the most common adjustments by IRS Business Valuers and what you might want to consider to both avoid an audit and what to do if audited. What does this have to do with The Collaboration Effect® you may ask. Read on. Clearly not everything in that podcast can be presented here, but some of the key highlights can be. The purpose of this commentary is to focus on one of the questions from that podcast. That is: What are the most common adjustments by IRS Business Valuers.

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