May 16, 2002 | Read Time: 1 minute
The Internal Revenue Service’s Art Advisory Panel has recalculated the value 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 advisory panel found that many people exaggerated the value of paintings 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 whom the IRS is auditing.
The committee steps in when a taxpayer says a work is worth at least $20,000.
In its 2001 report, the art panel said that 47 percent of 687 items in 89 cases had been valued incorrectly.
The committee agreed with taxpayers on 52 percent of the appraisals; 1 percent needed further study.
Taxpayers had claimed a total value of $115-million for the items, the vast majority of which were estate and noncharitable gifts to heirs.
The art panel recommended total adjustments of more than $73.1-million. That figure included reducing — from $2.8-million to $863,000 — the value of items for which an excessive charitable deduction had been claimed, and increasing — from $67.8-million to $133.5-million — the value of items deemed undervalued in estate and noncharitable gift appraisals.
The claimed value of the average piece of artwork donated to charity was $78,768, and the average noncharitable gift and estate item was $175,182.
