April 20, 2000 | Read Time: 1 minute
The Internal Revenue Service’s Art Advisory Panel has reviewed and recalculated the values of hundreds of pieces of artwork for which deductions were claimed by taxpayers who donated them to charities or left them to heirs.
As it has in the past, the committee found that many people exaggerated the value of paintings, sculptures, and other items contributed to charities and placed too small a value on objects left to heirs.
Each year, a committee of art experts meets to review appraisals submitted by taxpayers who are under I.R.S. audit. The committee steps in when a taxpayer says a work is worth at least $20,000.
In its report for 1999, the art panel said that 54 percent of 657 items in 80 cases had been valued incorrectly. The committee agreed with taxpayers on 38 percent of the appraisals and said 8 percent needed further study.
Taxpayers had claimed a total value of $178-million for the items. The art panel recommended total adjustments of $85.9-million, including a 49-percent reduction in the value of items for which an excessive charitable deduction had been claimed, and a 60-percent increase on undervalued items in estate and non-charitable gift appraisals.
The claimed value of the average charitable-contribution item was $507,367, and the average gift and estate item was $253,519.
