June 28, 2001 | Read Time: 1 minute
By GRANT WILLIAMS
The Internal Revenue Service’s Art Advisory Panel has reviewed and recalculated the value of thousands 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 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 who are under audit.
In its 2000 report, the art panel said that 38 percent of 2,546 items in 76 cases had been valued incorrectly. The committee agreed with taxpayers on 61 percent of the appraisals; 1 percent needed further study.
Taxpayers had claimed a total value of $266.5-million for the items, the majority of which were estate and noncharitable gifts.
The art panel recommended total adjustments of more than $76-million. That figure included a 75-percent reduction — from $1.7-million to $421,250 — in the values of items for which an excessive charitable deduction had been claimed, and a 47-percent increase — from $158.6-million to $233.3-million — on undervalued items in estate and noncharitable gift appraisals.
