IRS Art Advisory Summary Report for 2011

The IRS Art Advisory Summary Report for 2011 has now been published online. This is the yearly report which summarizes the activity of the Art Advisory Panel.

In 2011 the panel reviewed 344 items from 52 taxpayer cases under audit.  The 344 items had a tax payer claimed value of $111.185 million and a panel recommended value of $137.281 million. The Panel accepted 43% of the tax payer valuations while recommended adjustment to 56%.  On charitable donations claims the panel recommended a 46% reduction in the appraisals and a 51% increase from items in estate and gift appraisals. The average claim value was $409,070.

The summary report states

During FY11, the Panel completed its review of 344 items with an aggregate taxpayer valuation of $111,185,250 on 52 taxpayer cases under audit.  The average claimed value of a charitable contribution item was $1,008,500; the average claimed value for an estate and gift item was $409,070.

The Panel recommended accepting 43% and adjustments to 56% of the appraisals it reviewed.  One percent of the appraisals reviewed required additional staff development before the Panel could make a value recommendation.  The Panel recommended total net adjustments of $26,096,240 on the reviews AAS has finalized for these meetings. On the adjusted items, the Panel recommended a 46% reduction on the charitable contribution appraisals and a 51% increase on items in estate and gift appraisals.

The Panel also reconsidered 3 items in 3 taxpayer cases originally valued at $360,000 by the taxpayers and $1,000,000 by the Panel.  After reviewing the additional information, which included a subsequent sale, the Panel revised their recommendation to $592,500. These items are not included in the information above or that follows.

Comprehensive Recommendations Report

(Click on the charts to enlarge)

As an FYI to all personal property appraisers, last week I and several other appraisers from ISA, AAA and ASA met with appraisers from the Art Appraisal unit of the IRS.  The time has now come for penalties to be assessed according to the Pension Protection Act. The Art Appraisal unit will now be making recommendation to the IRS auditors if an appraisal is not deemed in compliance and warrants a penalty based upon an improper valuation.  The first of those appraisal subject to the penalties are now in the audit pipeline.

Source: Internal Revenue Service