6 ms·

Looks like the ultimate resolution was that the IRS dropped it in exchange for it being formally donated to the MoMA, so essentially just solidifying the status

by gwern 7y ago

Looks like the ultimate resolution was that the IRS dropped it in exchange for it being formally donated to the MoMA, so essentially just solidifying the status quo: https://www.thelegalpalette.com/home/2018/7/17/rauschenbergscanyon-value-in-the-eye-of-the-beholder https://www.thelegalpalette.com/home/2018/7/17/rauschenbergs... https://www.moma.org/explore/inside_out/2014/01/24/diving-into-rauschenbergs-canyon/ https://www.moma.org/explore/inside_out/2014/01/24/diving-in... Since the heirs couldn't sell it and it was forced to be on display in a museum, seems like it made very little difference, while allaying the IRS's theoretical concerns about it potentially being sold on the black market, I guess...

wickerman 7y ago
In all fairness the article details that the original owner was able to own the piece in the first instance on very shaky grounds, getting a nod from the right people in the Fish and Wildlife service: "Even then, the government revisited the issue in 1998. Rauschenberg himself had to send a notarized statement attesting that the eagle had been killed and stuffed by one of Teddy Roosevelt’s Rough Riders long before the 1940 law went into effect. Mrs. Sonnabend was then able to retain ownership as long as the work continued to be exhibited at a public museum. The piece is on a long-term loan to the Metropolitan Museum of Art in New York, which Mr. Lerner said insures it, but the policy details are confidential." I appreciate the intent behind the law, but this is one of those situations where a sensible argument could be made that a stuffed bird from before the law was put into place is hurting no one.
- jacobush 7y ago
  On the other hand a lot of “old” ivory is sold which is actually from recent butcher.
- michaelt 7y ago
  the original owner was able to own the piece in the first instance on very shaky grounds The Migratory Bird Treaty Act [1] and Bald and Golden Eagle Protection Act [2] both allow permits, issued by the Fish and Wildlife Service, for possession of the protected birds. This is used, for example, to allow museum exhibitions and Native American religious ceremonies. There's even a special form [3] to apply for the permit! So long as the eagle is in a museum that meets the requirements of the eagle exhibition permit, the ground seems pretty firm to me! [1] https://en.wikipedia.org/wiki/Migratory_Bird_Treaty_Act_of_1918 https://en.wikipedia.org/wiki/Migratory_Bird_Treaty_Act_of_1... [2] https://en.wikipedia.org/wiki/Bald_and_Golden_Eagle_Protection_Act https://en.wikipedia.org/wiki/Bald_and_Golden_Eagle_Protecti... [3] https://www.fws.gov/pacific/eagle/permit_types/exhibition_dead.html https://www.fws.gov/pacific/eagle/permit_types/exhibition_de...
- vorpalhex 7y ago
  The issue is that any loophole can and will be exploited by folks with a lot of money and an amazing amount of lawyers. One bad apple ruins the whole bunch.
flomo 7y ago
Sounds like the IRS was trying to encourage/strongarm the owners to charitably contribute the piece to a museum by offering them a fat deduction. Yay. (Probably would have better to have this unsalable art owned by the American people in the Smithsonian or somewhere, but good enough.)
- close04 7y ago
  > by offering them a fat deduction A deduction from a number that they "invented". If appraisers (and basically the market) say the value is 0 but the IRS says it's $65 million who is right? What if you have a regular piece of art that's appraised at say $1 million but the IRS says it's $1 billion? It appears the IRS's evaluation always stands. If so it's a perfect method to strong-arm at will. > Last fall, the agency sent the family an unsigned draft report that it was valuing “Canyon” at $15 million. After Mr. Lerner replied that the children were refusing to pay, the I.R.S. then sent a formal Notice of Deficiency in October saying it had increased the valuation to $65 million. And the strong-arming.
  - Simon_says 7y ago
    I say let the IRS put any value they want on it, but then give the owner an option to sell it to the IRS at that price that the IRS can’t refuse.
    - Ensorceled 7y ago
      Heck, even at a 10% discount. e.g. the IRS claims this is worth $65 million so there is an explicit offer to buy at $58.5 million and the IRS can make a bundle on the taxes and then on selling it for its "real" value.
    - asveikau 7y ago
      If I take that to its logical conclusion: do you believe the IRS should be expected to have the funds to purchase every conceivable asset at market price?
inlined 7y ago
If they had contacted the IRS first they could have either gotten it in writing as valued at $0 or made the charitable donation ahead of tax season, lowered their gains, and sold fewer art pieces to pay their tax bill.

by gwern 7y ago

wickerman 7y ago

In all fairness the article details that the original owner was able to own the piece in the first instance on very shaky grounds, getting a nod from the right people in the Fish and Wildlife service: "Even then, the government revisited the issue in 1998. Rauschenberg himself had to send a notarized statement attesting that the eagle had been killed and stuffed by one of Teddy Roosevelt’s Rough Riders long before the 1940 law went into effect. Mrs. Sonnabend was then able to retain ownership as long as the work continued to be exhibited at a public museum. The piece is on a long-term loan to the Metropolitan Museum of Art in New York, which Mr. Lerner said insures it, but the policy details are confidential." I appreciate the intent behind the law, but this is one of those situations where a sensible argument could be made that a stuffed bird from before the law was put into place is hurting no one.

jacobush 7y ago
On the other hand a lot of “old” ivory is sold which is actually from recent butcher.
michaelt 7y ago
the original owner was able to own the piece in the first instance on very shaky grounds The Migratory Bird Treaty Act [1] and Bald and Golden Eagle Protection Act [2] both allow permits, issued by the Fish and Wildlife Service, for possession of the protected birds. This is used, for example, to allow museum exhibitions and Native American religious ceremonies. There's even a special form [3] to apply for the permit! So long as the eagle is in a museum that meets the requirements of the eagle exhibition permit, the ground seems pretty firm to me! [1] https://en.wikipedia.org/wiki/Migratory_Bird_Treaty_Act_of_1918 https://en.wikipedia.org/wiki/Migratory_Bird_Treaty_Act_of_1... [2] https://en.wikipedia.org/wiki/Bald_and_Golden_Eagle_Protection_Act https://en.wikipedia.org/wiki/Bald_and_Golden_Eagle_Protecti... [3] https://www.fws.gov/pacific/eagle/permit_types/exhibition_dead.html https://www.fws.gov/pacific/eagle/permit_types/exhibition_de...
vorpalhex 7y ago
The issue is that any loophole can and will be exploited by folks with a lot of money and an amazing amount of lawyers. One bad apple ruins the whole bunch.

flomo 7y ago

Sounds like the IRS was trying to encourage/strongarm the owners to charitably contribute the piece to a museum by offering them a fat deduction. Yay. (Probably would have better to have this unsalable art owned by the American people in the Smithsonian or somewhere, but good enough.)

close04 7y ago
> by offering them a fat deduction A deduction from a number that they "invented". If appraisers (and basically the market) say the value is 0 but the IRS says it's $65 million who is right? What if you have a regular piece of art that's appraised at say $1 million but the IRS says it's $1 billion? It appears the IRS's evaluation always stands. If so it's a perfect method to strong-arm at will. > Last fall, the agency sent the family an unsigned draft report that it was valuing “Canyon” at $15 million. After Mr. Lerner replied that the children were refusing to pay, the I.R.S. then sent a formal Notice of Deficiency in October saying it had increased the valuation to $65 million. And the strong-arming.
- Simon_says 7y ago
  I say let the IRS put any value they want on it, but then give the owner an option to sell it to the IRS at that price that the IRS can’t refuse.
  - Ensorceled 7y ago
    Heck, even at a 10% discount. e.g. the IRS claims this is worth $65 million so there is an explicit offer to buy at $58.5 million and the IRS can make a bundle on the taxes and then on selling it for its "real" value.
  - asveikau 7y ago
    If I take that to its logical conclusion: do you believe the IRS should be expected to have the funds to purchase every conceivable asset at market price?

inlined 7y ago

If they had contacted the IRS first they could have either gotten it in writing as valued at $0 or made the charitable donation ahead of tax season, lowered their gains, and sold fewer art pieces to pay their tax bill.