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But if you assume that the IRS did this "by the book" then for your statement to be true the rules governing the process must state "only applicable to art coll

But if you assume that the IRS did this "by the book" then for your statement to be true the rules governing the process must state "only applicable to art collections". This is a bit of a stretch don't you think? If such a rule that gives the IRS the right to override an appraisal exists then it would extend to anything. Even if you only consider such corner cases eventually you'd find situations where you don't have to be a billionaire to be affected. And there's no reason to believe the IRS can do this only when talking about art that can't be sold.

gamblor956 7y ago
I'm a tax lawyer, dude, I deal with the IRS on a regular basis and have successfully managed an IRS challenge to a client's (sports memorabilia) collective appraisal. The IRS does not have the right to override an appraisal. What happened was this: taxpayer valued art at $0 without any supporting evidence. IRS special panel for appraising art (comprised of professional appraisers and art museum curators) valued art at $X million without knowing that it was illegal for taxpayer to own said art (because the law allows museums to own such items). Taxpayer challenged, saying they couldn't actually sell art for any amount, and the IRS agreed and waived the assessment in exchange for the taxpayer relinquishing ownership of illegal item to a museum. The only reason the kids in this situation even "owned" the art was a special dispensation given to their ancestors--not them--allowing them to "own" the art (a stuffed eagle) while it was in the possession of a museum. The dispensation didn't actually give the ancestors the power to transfer ownership to their children and there was a legal question that it could even be inherited.