Non Cash Charitable Donations

Appraisals for Non cash Charitable Deductions?
There is a nasty wrinkle in IRS document 8283. The next time you are contemplating an appraisal requiring form 8283 please be familiar with “Part III, Declaration of Appraiser.” Read the fine print before you sign, second paragraph about half-way through which states:
Furthermore, I understand that a false or fraudulent overstatement of the property values describe in the qualified appraisal or this Form 8283 may subject me to the penalty under section 6701(a) (adding and abetting the understatement of tax liability) In addition, I understand that a substantial or gross valuation misstatement resulting from the appraisal of value of the property that I know, or reasonably should know, or reasonably should know, would be used in connection with a return of claim for refund, may subject me to the penalty under section 6695A. . . .
Oh yes, you can bet that I am thinking mightily about the IRS because I appraised over one-million dollars in charitable tax donations last year. All well researched and documented, but having worked for the IRS in similar matters I can assure you that the service does not skim easily over large donations. I’m waiting for the letter.

My question to appraisers: have you decided to scale back on any appraisals involving the taxpayer and the IRS? I’ve put a statement in my engagement letter, in red script that any legal fees involving the defense of the appraisal will be on the client. You can guess accurately how many tax related appraisals I have done since inserting that statement.

If you have any questions about Noncash Charitable Contributions you may download the entire IRS Publication 526 from the U.S. government website.