Scheidelman v. Commissioner of Internal Revenue (Tax Court

Brief filed by IRS. The Tax Court held that the appraisal was not a 'qualified appraisal,' there was no reasonable cause exception, no substantial compliance, the endowment is not a deductible gift and no penalties due to reasonable reliance.

Brief filed in the 2nd Circuit for Petitioner Scheidelman. The Tax Court held that the appraisal was not a 'qualified appraisal,' there was no reasonable cause exception, no substantial compliance, the endowment is not a deductible gift and no penalties due to reasonable reliance.

Tax Court held that the appraisal was not a qualified appraisal because it did not contain a method and specific basis for valuation, essentially following Scheidelman

The Tax Court held that the appraisal was not a qualified appraisal due to omission of several dates and FMV. The Court found these omissions significant enough so as to preclude the application of the doctrine of substantial compliance.

The taxpayer failed to meet the burden of proof on valuation so the IRS' zero valuation was sustained. The Court declined to assess the accuracy-related penalty, finding that the original appraisal was qualified, that taxpayer had reasonable cause and acted in good faith reliance on the appraiser.

Opinion of the 2nd Circuit, overturning the previous ruling of the Tax Court with respect to Scheidelman v. Commissioner of Internal Revenue

The Tax Court found for the donor on the issues of qualified appraisal and substantial compliance with the 8283 but for the IRS on valuation.

Following Belk v. Commissioner, the Tax Court held that the conservation easement did not qualify for a charitable deduction because there was no 'qualified property interest' as required by section 170(h)(2)(C).

This factsheet describes the components of and other considerations for a qualified appraisal.

Tax Court largely agreed with taxpayer's appraiser but did reduce the value somewhat and found the reasonable cause exception avoided the penalty.