Value of Scientific Specimens

wbwarner wbwarner at QWEST.NET
Wed Jul 25 19:08:27 CDT 2001

You are both right, at least in part.  However, Ron, it IS the responsibility
of the DONOR to get an appraisal for any donations with total claimed value of
over $5000 in a given year.  For donations between $500 & $5000, an
acknowledgment letter is required to be submitted, less than $500 requires only
written records to be kept (receipts).  The accepting institution's valuation
does not suffice for an appraisal as it carries an inherent conflict of
interest.  And, the appraiser has personal liability in the scenario (he/she
must have expertise and rely on comps for FMV--false or misleading appraisals
could be the basis for law suits); check with a real estate or art appraiser
for specifics.  The receiving institution also has additional paperwork to fill
out for donors as well as certain requirements on control of the specimens for
donations over $5000.  Check IRS publications 526 & 561 for more details.



Ron Gatrelle wrote:

> ----- Original Message -----
> From: "Sally Shelton" <Shelton.Sally at NMNH.SI.EDU>
> Subject: Re: Value of Scientific Specimens
> > FYI:
> >
> > Museums in the public trust are flat-out barred from providing or
> certifying monetary appraisals of donations or potential donations. The
> museum cannot provide the values without getting in big trouble with the
> IRS and compromising its non-profit status. If you are the donor, you have
> to get the appraisal, and that cannot--CANNOT--be from anyone connected
> with the museum you are donating to. The museum can and should provide you
> with documents attesting that you provided the following value of the
> collection at the time of donation, but they can't verify that value
> through appraisal. > You have to talk to a professional appraiser to get a
> valuation that will serve your purposes. You can't donate a collection to
> the museum AND ask the museum to put a value on it. Value is primarily an
> issue between you and the IRS.
> >
> > Cheers, Sally
> >
> This is simply not true. I have founded three non-profits, two of which are
> religious. Two of these have to file 990 and one (a church) does not. 30
> years ago it began to be very concienient for, and the standard prqactice
> of, non-profits to stop placing a specific value on donated items e.g. a
> refrigerator to the VFW. A lot of why this came into vogue was that various
> non-profits were inflating the value to provide tax breaks for friends and
> family. The IRS began to crack down on this. Rather than provide evidence
> of appraisal their selves, the non-profits began to simply issue a receipt
> that stated "This receipt acknowledges the donation of _______ to ______.
> We do not place a value on donated items as this is the responsibility of
> the donor."  I (we) have provided hundreds of these receipts (mostly for
> items donated to our benevolence activities).  We did not have to do this.
> We chose to do this to keep the IRS off our backs and put them on the other
> guys.  I have lived through and worked on both sides of the receipt
> process.
> The USNM is a Federal entity. The FSCA is a State of Florida entity. The
> FSCA has and continues to both appraise and supply donors with receipts.
> Receipts that have been (and are) accepted by the IRS for decades. It is
> only required that an appropriate appraisal be made - by either party. All
> the IRS cares about is the accurate value. If a non-profit can give a
> receipt for a $10 bill. It can provide a receipt for a $10 specimen. Both
> are donated. Both have a set value. The key word being set. This is not art
> work with fluctuating value. They are specimens which, as the FSCA has
> done, are fixed in value by a minutely detailed long standardized system.
> Every tax return filed is primarily between the individual
> (person/business) and the IRS. So what?  If one will get a copy of the IRS
> regulations you will find that in the fine print it states that one does
> not even have to apply with the IRS to become a "non-profit" org. It does
> state (in a blackmail kind of way) that not "registering" as a 501 or
> whatever - will make it difficult (not impossible) for your donors to
> deduct contributions to your non-profit.
> The IRS allows a wide mode of operation for non-profits. There are very few
> wordings that they require in the incorporation documents. These are under
> prohibitions and restrictions. How do I know all any of this. Because I
> have formed all three non-profits all by myself - at both the state and
> Federal levels. The last being in 1998. I did all the paper work via
> personal consultation with the IRS. Yes, they advised and helped me set
> them up. How do I know we can provide an amount to a donor? The specialist
> agents said we could. If it couldn't be done, the FSCA would not still be
> doing it.
> Ron

More information about the Taxacom mailing list