Appraisal Training Institute Suggests Changes to Guidance Setting Appraiser Requirements

Internal Revenue Service

The College for Appraisers is an approved Degree and Certificate granting postsecondary institution approved by the California Bureau for Private Postsecondary and Vocational Education. We have been providing education to the professional personal property appraisal community since 1980 specializing in antiques, collectibles, fine arts, textiles and the whole range of household contents.

We are completely supportive of the goals of increasing the professionalism and standards of competence and ethics for personal property appraisers. We are also supportive of the goals of changes regarding Appraisal Requirements for noncash charitable contributions. We offer these comments for your consideration.

Re: Qualified Appraiser Section 1.170A-13(c)(5)

We support requirements of for designation of appraisers, for membership in professional associations. We particularly support the requirements for educational standards. We offer Certificates representing the equivalent 3-5 semesters of postsecondary coursework in general areas of personal property: Antiques, Fine Arts, Collectibles, etc. We believe that our focus on product content for antiques, collectibles, fine arts, and items that would be included as household items/contents is as good such courses get -- whether from any postsecondary institution or professional education offering from professional appraisal associations.

Our AAS degree in Personal Property Appraising, for example, is a 2 year degree. Our Master Certificate program is an additional 48 hours of coursework + thesis in a specific area.

Our appraisal report writing requirements are USPAP compliant with even greater levels of stringency for competence and protection of clients.

We believe that a curriculum focused on personal property from general household contents to antiques, collectibles, arts, jewelry is essential to qualified appraisal practice, and that the day of the self-taught connoisseur is certainly over.

We will certainly be offering stringent continuing education courses in the specific areas of researching and writing for IRS appraisals. We are adding USPAP Certification to our required coursework from its current status as an elective.

Re: Qualified Appraisal

We are supportive that appraisals should meet the standards of the relevant personal property appraiser organizations, e.g., International Society of Appraisers (ISA), Appraisers National Association (ANA), ASA, AAA, which set writing standards that are USPAP compliant or better.

RE: Qualified Appraiser

Regarding the requirement for two years experience in buying . . . . or valuing the type of property being valued: we wish to express several caveats.

1) The language requiring two years experience should be modified. The range of personal property is large -- even within the designation of "household contents" from glass to art glass to good costume jewelry to very pricey costume jewelry to estate jewelry, from high end furniture to Eastlake side chairs, and so on. USPAP standards already provide a guideline that appraisers accept only appraisals that are within their expertise. The requisite that an appraiser would need two years experience in any possible area of personal property valuation is onerous, and we feel a potential source of lengthy litigation for no potential benefit.

2) Education should be an acceptable substitution for at least some of the experience requirement. Education such as we provide is both focused on research and also "hands-on," and should be considered an acceptable substitute. Secondly, there is no equivalent in the personal property career path for apprenticeships for appraisers such as is a requirement for real property appraisers. A two year experience requirement for each area of property being valued would needlessly narrow the pool of qualified appraisers and also inflate the cost to the donor of any appraisal. In sum, we believe that just as other professions endow their graduates the ability to practice without a apprenticeship of any period, e.g., accountants, engineers, nurses, etc. etc., the professional appraiser need not serve one.

3) Again, the impact of demanding two years experience in any but the most general sense of personal property items, will be unduly onerous on small appraisal practices. These businesses may include from 1-5 persons and often combine formal appraisal writing with buying, selling, or valuing in other venues such as auctions, internet sales or estate sales.

Intended vs Unintended impacts:

We are supportive of the goal to prevent inappropriate values for art work, clothing, items of poor quality and little market value. We believe that requiring qualified appraisals for items of $500 -- especially in light of the addition of civil penalties for appraisers will have the immediate effect of reducing the number of persons who will write appraisals for noncash contributions, increasing the cost of those appraisals -- and as a direct result decreasing the number and value of gifts in the range of $500 -- 5,000 and likely of gifts under $20,000 in general. Surely, the cost of a qualified appraisal will equal or exceed the value of a deduction for donors of items between $1-4,000.

We believe that these regulations will inordinately impact middle class donors to smaller charities (e.g., schools, hospitals, retirement communities, womens/children's shelters) and will have the effect of increasing the ire of those parties who already feel frustrated by what they perceive to be a too complex and burdensome tax code with the middle class being the least well served.

Costs of Doing Business for Appraisers will surely increase, as will the price of a "qualified appraisal." Plus, we fear that insurance companies offering O&E coverage may be the real beneficiaries of the civil penalties clause of this code.

Re: Enforcement

We, of course, also wonder what the enforcement of these new appraisal requirements will be. Will the IRS be hiring multitudes of professional appraisers to review the appraisals of persons now claiming deductions in the $500 -- $5,000 range, and to review the qualifications of appraisers for much larger gifts? We appreciate the opportunity to comment.