- 16 -
deduction for failure to strictly comply with the regulations
would, petitioners believe, constitute an unwarranted sanction.
Respondent, in contrast, argues that petitioners did not
substantially comply with the regulations. Respondent argues
that Bond is distinguishable because petitioners failed to obtain
a qualified appraisal. Respondent argues that petitioners’ case
is more factually similar to cases such as Hewitt v.
Commissioner, 109 T.C. 258 (1997), and D’Arcangelo v.
Commissioner, T.C. Memo. 1994-572.
In Hewitt, the taxpayers donated non-publicly traded stock.
The taxpayers claimed a charitable contribution deduction and
attached a Form 8283 to their tax return. The taxpayers did not
have the stock appraised. Instead, they calculated the value of
the stock on the basis of prices reflected in recent third-party
trading activity. Hewitt v. Commissioner, supra at 259-260. The
Commissioner did not dispute that the amount of the claimed
deduction represented the fair market value of the contributed
stock. Nevertheless, the Commissioner disallowed most of the
claimed deduction because the taxpayers had not obtained a
qualified appraisal. Id. at 262.
The Court held that the taxpayers had not substantially
complied with the regulations. In distinguishing Bond v.
Commissioner, supra, we noted that “the reporting requirements of
section 1.170A-13, Income Tax Regs., were directory, not
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011