As a patron of the arts, the U.S. Internal Revenue Service has made Lorenzo the Magnificent look like a piker. The law, tolerantly enough, lets people give paintings to a museum, take current appraised value as a deduction from taxable income, then keep the paintings in their homes for life (TIME, Nov. 24). But many a giver wants to get an extra measure of tax advantage by inflating the value of the gift. The method is to get an “expert” to pin a false appraisal on the work; the Government has not often questioned the appraisals. In one case, a dealer sold a painting for $7,000, but at once appraised it, for the purchaser’s philanthropic “tax purposes,” at $24,000. In another case, an artist, giving three of his paintings, took a deduction of $75,000—and his “expert” turned out to be the caretaker of the benefiting museum. (The artist had never been able to sell one of his own works for more than $250.)
Last week Internal Revenue Service Commissioner Mortimer Caplin indicated that he was tiring of the Medici role. Henceforth, he declared, his field agents would insist that all appraisals on donated works of art would have to conform to realistic market value. Warned Caplin: “The service is not required to accept appraisals merely because they were prepared by ‘expert appraisers.’ “
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