Archive 2011-40: IRS DLOM Job Aid




IRS’s DLOM Job Aid – A Review of the Discount for Lack of Marketability Job Aid for IRS Valuation Professionals

presented by
Jim Hitchner, CPA/ABV/CFF, ASA, Moderator with Jim Alerding, CPA/ABV, ASA, CVA

**Webinar 40 Broadcast Date: August 23, 2011**

Webinar Overview:

Learn how the IRS evaluates discounts for lack of marketability in the IRS’s blockbuster document “Discount for Lack of Marketability Job Aid for IRS
Valuation Professionals.” This 107 page Job Aid reviews almost all the DLOM models, databases and studies and was prepared by the IRS
Engineering/Valuation Program DLOM Team.

As stated in the IRS DLOM Job Aid: “We will endeavor to explain the intent of the approaches most widely relied upon by practicing valuators as to how
each estimates DLOM. We will identify the parameters used in a given approach, the strengths and weaknesses of the approach, the view of the valuation
community concerning the approach, and what the courts have had to say about the approach, if anything. The job aid also provides initial IDR questions
for examination of DLOM and some sample report language for reviewers to consider in situations where it’s clear that the approach being used by the
taxpayer is in error.”

Webinar Outline:

  • IRS’s review of the following DLOM models, databases and studies:
  • Benchmark restricted stock studies
  • FMV Opinions restricted stock database and methodology including the restricted stock equivalent analysis
  • Pre-IPO studies including Emory and Willamette benchmark studies
  • Valuation Advisors detailed database
  • Long-term equity anticipation securities (“LEAPS”)
  • Longstaff upper bound look back option model
  • Chaffee option model
  • Wruck private placement study
  • Hertzel and Smith private placement study
  • Bajaj, Denis, Ferris and Sarin private placement study

  • Quantitative Marketability Discount Model (“QMDM”)

  • Partnership Profiles/Partnership Spectrum database

  • Mandelbaum
    factors/Judge David Laro’s Tax Court opinion

Learning Objectives:

  • The participant will learn the IRS’s view on the applicability and reli­ability of most of the major DLOM methods, models and data including
    background, summary, areas of focus, strengths, weaknesses, important parameters, prevalence in professional practice, and court case coverage and
  • The participant will learn about the 33 factors the IRS has identified as influencing DLOM including subject company and subject interest factorss
  • The participant will learn about the “Sample Initial IDR Items on Marketability” – 17 items to include in IRS Information Document Requests including
    commentary on each item’s relevance
  • The participant will learn about how the IRS approaches a marketability discount as a reviewer and a valuator
  • Included in this downloadable package are:

    • Audio/Video file
    • Webinar transcript
    • Original Webinar handouts

    The archived webinar package is an Adobe Presenter PDF file that allows you to view the video of the webinar with the synced audio so that you see the presentation just as it was presented “live.” The Presenter format also allows for easy navigation through the webinar so you can quickly go to a specific section in the presentation. The handout materials are included in the file. To view the Webinar Presenter file, you must have Adobe Reader software version 9 or higher. You can download the free current version of Adobe Reader at Please note that CPE is only available for live webinar broadcasts.

    Additional information

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