How does the new law prevent abuse?
Under the new law, the definitions of substantial and gross misstatements of value have been changed. Previously, a taxpayer whose donation was finally determined to be worth $200,000 would have been guilty of a substantial misstatement if they had claimed a value of $400,000, and guilty of a gross misstatement if they had claimed a value of $800,000. Now, they would be guilty of a substantial misstatement for claiming a value of $300,000, and of a gross misstatement if they claimed a value of $400,000. There are substantial additional tax penalties for such misstatements for the taxpayer, and they make the appraiser subject to penalties of up to 125% of their fee plus potential disbarment from working on federal tax matters. The law also redefines who is a “qualified appraiser”, and gives the IRS the power to issue new regulations on appraiser qualifications. This is important: as of the date of enactment of this law, appraisers will need to show donors that they are qualified under t
