An Empirical Inquiry into the Role of the Tax Court in the Valuation of Property for Charitable Contribution Purposes

Several commentators have examined the valuation process for property and closely held stock in estate, gift, and income tax cases in the federal courts. Examination of court determined values led many to conclude that the courts do not actually value property or closely held stock but rather serve...

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Bibliographic Details
Published in:The Accounting review 1979-07, Vol.54 (3), p.554-562
Main Authors: Englebrecht, Ted D., Jamison, Robert W.
Format: Article
Language:English
Subjects:
Art objects
Assessed valuation
Charitable giving
Closely held corporations
Cultural values
Donations
Estate taxes
Fair market value
Income taxes
Internal Revenue Code
Property
Property taxes
Real property taxes
Regression analysis
State court decisions
Studies
Tax court decisions
Tax courts
Tax deductions
Tax regulations
Taxpayers
Taxpaying
Valuation
Value
Value appraisal
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Summary:Several commentators have examined the valuation process for property and closely held stock in estate, gift, and income tax cases in the federal courts. Examination of court determined values led many to conclude that the courts do not actually value property or closely held stock but rather serve as compromisers between the two opposing parties in litigation. The implications for tax counsel and public policy are extremely significant if this charge is supported by fact. The major purpose of this study is to demonstrate statistically that the Tax Court does not act in a manner consistent with a "compromiser model" in federal income tax valuations of property for charitable contribution purposes. A simple regression model is used to test the relationship between the Tax Court determined values and a compromise value-the arithmetic mean of tax-payer and IRS value estimates. In addition, chi-square analysis indicates that the Tax Court did not value one type of property more strictly or generously than other types.
ISSN:0001-4826
1558-7967