Federal Register, Volume 80 Issue 142 (Friday, July 24, 2015)
[Federal Register Volume 80, Number 142 (Friday, July 24, 2015)]
[Notices]
[Pages 44196-44198]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-18115]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
Art Advisory Panel--Notice of Availability of Report of 2014
Closed Meetings
AGENCY: Internal Revenue Service, Treasury.
ACTION: Notice.
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SUMMARY: Pursuant to 5 U.S.C. App. 2, section 10(d), of the Federal
Advisory Committee Act, and 5 U.S.C. 552b, of the Government in the
Sunshine Act, a report summarizing the closed meeting activities of the
Art Advisory Panel during Fiscal Year 2014 has been prepared. A copy of
this report has been filed with the Assistant Secretary for Management
of the Department of the Treasury.
DATES: Effective Date: This notice is effective July 24, 2015.
ADDRESSES: The report is available for public inspection and requests
for copies should be addressed to: Internal Revenue Service, Freedom of
Information Reading Room, Room 1621, 1111 Constitution Avenue NW.,
Washington, DC 20224, Telephone number (202) 622-5164 (not a toll free
number). The report is also available at www.irs.gov.
FOR FURTHER INFORMATION CONTACT: Maricarmen R. Cuello, AP:SO:AAS,
Internal Revenue Service/Appeals, 51 SW. 1st Avenue, Room 1014, Miami,
FL 33130, telephone (305) 982-5364 (not a toll free telephone number).
SUPPLEMENTARY INFORMATION: It has been determined that this document is
not a major rule as defined in E.O. 12291 and that a regulatory impact
analysis therefore, is not required. Neither does this document
constitute a rule subject to the Regulatory Flexibility Act (5 U.S.C.
chapter 6).
Kirsten B. Wielobob,
Chief, Appeals.
The Art Advisory Panel of the Commissioner of Internal Revenue
Annual Summary Report for Fiscal Year 2014 (Closed meeting activity)
Overview
Created in 1968, the Art Advisory Panel of the Commissioner of
Internal Revenue (the Panel) provides advice and makes
recommendations to the Art Appraisal Services (AAS) unit in the
Office of Appeals for the Internal Revenue Service (IRS). Chartered
under the Federal Advisory Committee Act (FACA), the Panel helps the
IRS review and evaluate the acceptability of tangible personal
property appraisals taxpayers submit to support the fair market
value claimed on the wide range of works of art involved in income,
estate, and gift tax returns.
When a tax return selected for audit includes an appraisal of a
single work of art or cultural property valued at $50,000 or more,
the IRS examining agent or appeals officer must refer the case to
AAS for possible referral to the Panel, unless a specific exception
exists. The AAS staff supports and coordinates the Panel meetings,
while the AAS appraisers independently review taxpayers' appraisals
for art works not referred to the Panel.
The Panel provides essential information to help foster
voluntary compliance. The information and recommendations play an
important role in the IRS's efforts to cost-effectively address the
potentially high abuse area of art valuation. The panelists provide
information, advice, and insight into the world of art which cannot
be obtained effectively from within the IRS. The Panel does not
duplicate work performed in the IRS. The AAS appraisers review
appraisals by researching publicly available information; the Panel
provides additional knowledge of private sales based on their
personal experience as dealers, scholars, and museum curators, and
from information obtained from other members of their relatively
small industry. The panelists' knowledge is particularly beneficial
when questions exist about the authenticity or condition of works of
art.
Art Appraisal Services takes steps to ensure objectivity and
taxpayer privacy. Information provided to the panelists does not
include the taxpayer's name, the type of tax, the tax consequences
of any adjustments to the value, or who did the appraisal. To
minimize the possibility that panelists recognize a taxpayer's
entire collection, the art works are usually discussed in
alphabetical order by artist or, in the case of decorative art, by
object type. If there is a conflict of interest with a panelist and
a work of art under review, the panelist does not participate in the
discussion and is excused from that portion of the meeting.
Before Panel meetings, AAS appraisers send photographs and
written materials to the panelists about the works of art under
[[Page 44197]]
review. The materials include information from the taxpayer's
appraisal, such as size, medium, physical condition, provenance, any
comparable sales, and appraised value, and the AAS appraiser's own
research, including available information on public and private
sales of relevant art work.
During their meetings, the panelists review the information
provided, along with the research and findings of both the panelists
and AAS appraisers. After discussing each item individually, the
panel reaches consensus on its value. Panel discussions are lively
and serious. Despite the different perspectives of dealers, museum
curators, and scholars, substantial disagreements are rare. When
disagreements happen, they generally result from insufficient
information. In these cases, the panelists may recommend additional
research, such as inspecting the property or consulting with
additional experts, before making a recommendation as to value. Once
the AAS appraiser completes the additional work, the item may be
brought up for review at a subsequent Panel meeting.
The Panel's recommendations are advisory. The AAS staff reviews
all of the Panel's recommendations, which become the position of the
IRS only with AAS concurrence. In Fiscal Year 2014, AAS adopted in
full 90% of the Panel's recommendations and adopted the rest in
part.
The AAS staff provides written reports or memos to the
requesting IRS office, with a copy for the taxpayer, outlining the
Panel's recommendations for any adjustments to fair market value
with all supporting evidence.
Taxpayers may request reconsideration of an adjusted claimed
value only if they provide new information or probative evidence.
The AAS staff may submit such information to the Panel for
reconsideration at a subsequent meeting.
Panel Leadership
The Director, Art Appraisal Services serves as the Panel Chair
and Designated Federal Officer (DFO) for FACA purposes.
Panel Sub-Committees
The DFO has the authority to create subcommittees or workgroups.
Subcommittees may be established for any purpose consistent with the
Panel's charter, and are comprised of Panel members. There are
currently two subcommittees: the Fine Arts Panel, which reviews
items such as paintings, sculpture, watercolors, prints, and
drawings; and the Decorative Arts Panel, which reviews items such as
antique furniture, decorative art, ceramics, textiles, carpets, and
silver.
Meetings
The Panel generally meets once or twice a year in each
subcommittee area. Panel meetings are closed to the public since all
portions of the meetings concern matters that are exempted from
disclosure under the provisions of section 552b(c)(3), (4), (6) and
(7) of Title 5 of the U.S. Code. This determination, which is
consistent with section 10(d) of the Federal Advisory Committee Act,
as amended (5 U.S.C. App. 2), is necessary to protect the
confidentiality of tax returns and return information as required by
Internal Revenue Code Sec. 6103.
The meetings held during this reporting period included:
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Type Date Location
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Fine Arts................................ April 16, 2014.............. New York, NY.
Fine Arts................................ September 11, 2014.......... Washington, DC.
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The Decorative Arts Panel did not meet in Fiscal Year 2014.
Summary of Panel Recommendations
During Fiscal Year 2014, the Panel reviewed 315 items with an
aggregate taxpayer valuation of $250,800,500 on 54 taxpayer cases
under examination. The average claimed value of a charitable
contribution item was $634,000; the average claimed value for an
estate and gift item was $799,341.
The Panel recommended accepting 38 percent and adjusting 62
percent of the appraisals it reviewed. On the adjusted items, the
Panel recommended total net adjustments of $55,706,000 in estate and
gift tax appraisals, a 23 percent increase. Net adjustments for
charitable contributions totaled $2,077,000, a 55 percent reduction.
The Panel reconsidered seven items in three taxpayer cases
originally valued at $13,235,000 by the taxpayers and $18,300,000 by
the Panel. After reviewing the additional information, the Panel
revised their recommendations to $17,300,000. The items from these
three taxpayer cases are not included in the information above or
that follows.
Comprehensive Recommendations Report
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Net change (panel
Type of tax Number of T/P claimed Type of Panel less claimed
items value adjustment recommendation value)
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Estate...................... 70 $32,275,000 No Change...... $32,275,000 $0
58 36,257,000 Increase....... 66,839,000 30,582,000
31 18,207,000 Decrease....... 10,308,500 (7,898,500)
Gift........................ 50 42,935,000 No Change...... 42,935,000 0
49 66,262,500 Increase....... 113,730,000 47,467,500
51 51,060,000 Decrease....... 36,615,000 (14,445,000)
Charitable Contribution..... 6 3,804,000 ALL............ 1,727,000 (2,077,000)
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Totals.................. 315 250,800,500 ............... 304,429,500 53,629,000
Items Adjusted.............. 194 .............. ............... .............. 53,629,000
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Art Advisory Panel of the Commissioner of Internal Revenue 2014
Ms. Stephanie Barron Senior Curator of Modern Art, Los Angeles
County Museum of Art, Los Angeles, CA
Mr. Douglas Baxter* President, The Pace Gallery, New York, NY
Mr. Leon Dalva Dalva Brothers, Inc., New York, NY
Ms. Alice Duncan Director, Gerald Peters Gallery, New York, NY
Mr. Michael Findlay Director, Acquavella Galleries, Inc., New York,
NY
Mr. Brock Jobe Professor of American Decorative Arts, Winterthur
Museum, Winterthur, DE
Mr. Christian Jussel Independent Scholar/Art Adviser, New York, NY
Ms. Rebecca Lawton Curator of Paintings and Sculpture, Amon Carter
Museum, Fort Worth, TX
Ms. Barbara Mathes Barbara Mathes Gallery, New York, NY
Ms. Nancy McClelland McClelland + Rachen, New York, NY
Ms. Susan Menconi Partner, Menconi & Schoelkopf Fine Art, New York,
NY
Mr. Howard Rehs Director, Rehs Galleries, Inc., New York, NY
Mr. James L. Reinish Principal, James Reinish & Associates, Inc.,
New York, NY
Mr. Joseph Rishel The Gisela and Dennis Alter Senior Curator of
European Painting before 1900, and John G Johnson Collection,
Philadelphia Museum of Art, Philadelphia, PA
[[Page 44198]]
Dr. Andrew Robison Mellon Senior Curator of Prints and Drawings,
National Gallery of Art, Washington, DC
Mr. Louis Stern Louis Stern Fine Arts Inc., Los Angeles, CA
Dr. Scott Schaefer** Senior Curator of Paintings, J. Paul Getty
Museum, Los Angeles, CA
Mr. David Tunick President, David Tunick, Inc., New York, NY
* Resigned in January 2015
** Changed employers and subsequently resigned in January 2015
[FR Doc. 2015-18115 Filed 7-23-15; 8:45 am]
BILLING CODE 4830-01-P
