Comment on the Art Advisory Panel Post

As you know, I like to post comments that I get by either email or in the comment section into regular posts so all can see.

Fellow appraiser Judith Vance, ASA of Judith Vance Fine Art Appraisals sent a comment on the post. I think it is very relevant, and all appraisers should think deeply about what she is saying. Some of the tips about turning down an assignment if the taxpayer appears to have too many deductions is a great tip. Risk avoidance is certainly a part of our business, and no appraiser wishes to see his report reviewed, and valuations altered by the IRS. Not a good sort of notoriety or promotion. Judith also gives some insight into how the advisory panel operates.

I'm glad you called attention to the Art Panel Report; all personal property appraisers who do reports that might come under scrutiny should watch for it every year.

There are a couple of other bits of information about this process appraisers should have. Tax returns can be flagged for review for a number of reasons. If you suspect that a potential client seems likely to be pushing the envelope with deductions, don't accept the assignment. (I've turned down several of these in the last month or so.) I've found this is usually apparent pretty early in the first conversation. If you take the job anyway, be sure you are the last signer of the 8283, as you should be anyway.

It should also be pointed out that when reports come to the Panel for review, the appraisal services office of the IRS, which is comprised of accredited appraisers, does its own research, as do the individual panel members, who are sent information in advance on the works to be reviewed.

They research the value of these works without knowing whether the valuations are for donations, gifts or estate tax. Knowing this, one can see from the direction and amount of the adjustments in these categories just how off-the-mark the original appraisals were.

(Theoretically, they don't know who the taxpayer is either, but in some cases knowledgeable members of the panel may recognize the art and know the identity of the owner.)