Can Museum Appraiser/Volunteers do Appraisals for their Museum?
(by David Maloney) Donees, staff and their relations are prohibited by the IRS from doing appraisals of items being donated to their respective institutions. But what about volunteers such as committee members or members of the BOD? Are they, too, prohibited?
For the most part, IRS Pub 561 is clear as to who may and may not do appraisals for Federal income tax purposes, including non-cash charitable contributions. Those who may are termed “qualified appraisers.” Those who are not are termed “excluded individuals.”
Pub 561 specifically states that there are several categories of individuals who are excluded from doing such appraisals for donation purposes. Excluded are:
- The donor, or the taxpayer claiming the deduction
- The donee (i.e., the receiving institution)
- The party who sold the property to the donor (unless the sale was within the past two months and the appraised value does not exceed the sales price)
- Any persons employed by the above
- Any person related to any of the above or married to a person related to any of the above
- Any person who appraises regularly for the donor, donee or the party who sold the property to the donor and does not perform the majority of appraisals for other parties.
- In addition, “…a person is not a qualified appraiser for a particular donation if the donor had knowledge of facts that would cause a reasonable person to expect the appraiser to falsely overstate the value of the donated property.” An example would be if the donor and the appraiser agreed to a predetermined value which the donor knows is too high (for a donation appraisal) or too low (for an estate appraisal.)
While Pub 561 clearly states that employees of the donee are excluded from doing appraisals, it does not address those appraisers who happen to serve in a volunteer capacity. Appraisers often volunteer to serve at museums or historical societies as committee members, docents, board members or assistants to paid staffers such as librarians or curators.
According to the International Council of Museums,
“…when the museum itself may be the beneficiary, appraisals of an object or specimen must be undertaken independently.”
Since museums are prohibited from doing appraisals, it is often natural for them to call upon the services of talented volunteers who also happen to be appraisers, but they should not do so.
The underlying issue, as is often the case, involves actual (or perceived) appraiser bias. The ETHICS RULE of USPAP prohibits the appraiser from performing an assignment “with bias,” which USPAP defines as
“a preference or inclination that precludes an appraiser’s impartiality, independence, or objectivity in an assignment.”
It is such a natural inclination that it would be hard for any volunteer serving in an official capacity to argue that they did not have a bias which was favorable to their institution. More importantly (and more to the point), a “reasonable person” would likely feel the same way.
While the issue of volunteer appraisers is not addressed in IRS Pub 561, an IRS representative has stated,
“I would consider board members or committee members, even volunteers, as being prohibited from appraising items donated to their institution.”