Last week at the Texas Forum on International Tax in Dallas, I had the chance to do something I always enjoy: Pull back the curtain a bit.
My session introduced the audience to the IRS Engineering & Valuation (E&V) program. What it does, how it works, and why it's quietly one of the most important technical units inside the Service. Many tax practitioners have heard of E&V, but few have seen how central it is to estate, gift, and closely held business valuations. A huge thank-you to the TFIT organizers for inviting me to speak, and to the professionals who stayed afterward to dig deeper into the topic.
As many of you know, the rapid restructuring of federal agencies is already reshaping the environment for tax professionals, especially those of us who work in business valuation. While the headlines focus on budget cuts, the deeper story is how the rapid loss of technical staff and institutional knowledge within the E&V program is changing valuation practice in real time. Not with new regulations or court cases, but through absence: Fewer specialists, the loss of hard-won expertise, and the reduction of enforcement.
That makes it even more important for practitioners to anchor their work in strong methods, clear documentation, and ethical judgment.
Two predictions
Aside from lower audit coverage, which everyone expects, here's where I think this goes:
1. Valuation by "fiat" could replace true technical review. As expertise inside agencies disappears, bureaucracies may fall back on rule-of-thumb shortcuts: Standardized discount caps, asset-specific method mandates, narrow lists of "acceptable" data sources. The result isn't market-driven convergence. It's administrative convergence. A resource-strapped IRS may increasingly default to pre-approved numbers just to keep up with volume, assuming enforcement takes place at all.
2. Advisory work shifts from defending positions to designing them. With fewer human reviewers, the real value lies in a professional's ability to engineer tax returns and valuation reports so they're resilient to algorithmic screening. Clients will pay more for advisors who understand how to avoid automated red-flag triggers. Clean data becomes the new compliance.
What are yours?