THE BOOK BLOCK LLC

Fine & Rare Books

¶ Member ABAA & ILAB

P.O. Box 256

Lake Forest, Il 60045-0256

847/482-0098 Phone

847/615-1036 Fax

Email: Inquire@thebookblock.com

Website: www.thebookblock.com

October 28, 2008

Ms. Susan J. Kassell

Internal Revenue Service

Office of the Associate Chief Counsel

Room 5203

PO Box 7604, Ben Franklin Station

Washington, DC 20044

Re: Proposed Regulation 26 CFR § 1.170A-17 (IRS REG -- 140029-07)

I write in response to the notice of proposed rulemaking issued on
Thursday, August 7, 2008 concerning "Substantiation and Reporting
Requirements for Cash and Noncash Charitable Contribution Deductions."

I request a public hearing. Since, however, I have no plans to be in
Washington, I would be grateful to appear via videoconference from your
Chicago office that is conveniently located and would save me time and
travel expense.

Please note that I submitted comments on Notice 2006-96 on December 11,
2006 and February 27, 2007 that may be helpful in connection with my
comments below. Please also note that my remarks represent my views only
and I do not purport to speak on behalf of others.

[Proposed Regulation § 1.170A-17]{.underline}

I am extremely pleased that proposed regulation § 1.170A-17 clearly
shows careful consideration of previously submitted comments and that
its drafters made reasonable choices that balance statutory constraints
and practical considerations. The proposed regulations are helpful,
rational and laudable in many respects. Nonetheless, I request
consideration of my recommendations that follow that also are intended
to respect the statutory regimen while enabling me and my similarly
situated colleagues to continue the long tradition of experienced,
professional antiquarian booksellers providing appraisal services to
collectors, institutions and other owners of antiquarian books. In
summary and as more fully described below, these recommendations are:

1- accept the Antiquarian Booksellers' Association of America as a
recognized professional appraisal organization and membership in it as a
recognized appraisal designation. This recommendation reflects the
absence of any recognized professional appraisal organization dedicated
to the antiquarian book industry, and,

2- extend the ability to satisfy the education requirement for "on the
job" training beyond the current proposal that allows it only " . . . as
part of an employee apprenticeship or educational program . . ." While
this provision is very helpful for the very few antiquarian booksellers
employing enough people to rely upon it, the vast majority of the
antiquarian book trade will not be able to use it by reason of operating
very small businesses. Beyond the size of the business, however, lies
the reality that no adequate education on valuation of antiquarian books
currently is available at either the college or professional level and
all such training comes through working in the field where valuation
skills are indispensable to success.

[Description of The Book Block LLC and the Antiquarian Book
Industry]{.underline}

I am a member of The Book Block LLC, a dealer in "fine and rare books"
that sometimes are described collectively as antiquarian books. Please
note that "antiquarian" is an imprecise term that implies antiquities
but is commonly employed to describe collectible books of all sorts
regardless of age. Since antiquarian is a useful way to describe
collectible books, I employ it frequently in the discussion that
follows.

The Book Block deals in "fine books" that we define as high quality
books printed in small quantities by private presses that often are
operated by just one person and rarely by more than a handful. For
example, many high quality books have been produced by private presses
in quantities of less than one hundred copies. By contrast, common books
are mass produced by commercial presses in very large quantities that
generally run into the thousands and are available from national chains
and many independent bookstores. As implied by the name, "rare books"
are extremely scarce and often are extraordinarily difficult, if not
impossible, to find on the market. Our rare book business typically
involves those published between the 16^th^ and 20^th^ centuries.

Our business has both a goods and a services component. The goods
portion entails acquiring rare and fine books and selling them to
individual collectors and institutions such as museums, historical
societies, and libraries. Our services business consists of book
advisory activities and appraising books for a variety of purposes
including tax and insurance.

We belong to the Antiquarian Booksellers Association of America
("ABAA"), the best known, most highly respected and reputable
association of antiquarian booksellers in the United States that at last
count had over 450 active members. The ABAA is the US chapter of the
International League of Antiquarian Booksellers, the leading global
antiquarian booksellers' organization with chapters in many developed
nations and some developing countries. Membership in the ABAA requires
satisfying stringent admission standards including four years of full
time experience in the antiquarian book trade. Although I do not have
the statistics available, I estimate that the average ABAA member is 55
years old with 25 years of antiquarian book experience. Importantly, the
ABAA has a code of ethics to which members must subscribe and those
members who fail to comply risk expulsion or other discipline.

The antiquarian book trade is a fractured industry that operates
entirely through small businesses. To illustrate, few antiquarian
booksellers have more than one location and I believe that only a
handful of US antiquarian booksellers have annual revenues in excess of
\$25 million. Further, there has been an accelerating trend of "used
bookstores" shutting their doors forever as consumers increasingly rely
upon the internet for their book acquisition needs. While some of the
owners of these closed stores leave the trade entirely, many others move
their operations to a home office from which their business is
continued.

Most of the business of an antiquarian bookseller consists of trading
based upon acquiring books at prices below retail fair market value and
selling them to collectors and institutions willing to pay more. The
antiquarian book market is illiquid and therefore a thorough
understanding of book valuation is a critical component of bookseller
success. As in most markets, antiquarian book value is a function of
supply and demand. Important elements that influence value include
rarity, condition and importance, e.g., an important book in very good
condition that is hard to come by will be more valuable than other less
important and more readily available books in poor condition.

Another important factor in antiquarian bookseller success, and one that
separates the amateurs from the professionals, is knowledge. Thus, for
example, understanding whether a 16^th^ century book is complete,
knowing the indications that distinguish a first edition from a later
edition and understanding relevant auction results represent knowledge
that is second nature to bookselling professionals but bewildering to
the amateur. To illustrate, I have seen numerous remarkable and
occasionally humorous cases of antiquarian books misidentified on
internet auction sites, e.g., books erroneously described as first
editions, and, books described as signed by the author who in fact died
years before the publication date. As in other fields, however, the
internet has brought more antiquarian book information, most of it
accurate, to more people with the consequence that the information
advantage of the "middleman" professional bookseller has narrowed.

No organization in the antiquarian book trade currently confers
credentials attesting to an individual's competence as a book appraiser.
Nonetheless, collectors and institutions routinely rely upon the
valuation opinions of experienced antiquarian booksellers to serve their
appraisal needs. The selection of booksellers to provide appraisal
services to collectors and institutions undoubtedly is a function of
perceived experience, competence and reputation. Again lacking
statistics, I nevertheless am comfortable suggesting that the great
majority of substantial book appraisals in the US are performed by ABAA
members who are perceived as the most knowledgeable and ethical
valuation experts available to appraise antiquarian books. Importantly,
appraisers from other fields rarely, if ever, appraise antiquarian
books. One reason is that serious collectors and institutions understand
that such appraisers lack the necessary expertise in the antiquarian
book field. Another is that such appraisers know they lack understanding
of the antiquarian book market and acquiring the essential knowledge
would be a daunting and time consuming task for which clients would be
unwilling to pay.

As I hope the above discussion suggests, the antiquarian book trade is a
truly free marketplace of small professional and amateur booksellers
competing on the basis of price and knowledge and where long term
success is awarded to those demonstrating competence and the ability to
establish enduring relationships with collectors and institutions. Note
that "one-off" opportunistic trades are executed on a daily basis via
internet transactions where knowledge, competence and ethics often yield
to price considerations. Such sales, however, generally involve common
books that change hands at relatively low prices. Finally, substantial
appraisals generally are conducted by professional booksellers whom the
marketplace has identified as ethical, competent and experienced.
Membership in the ABAA is an important indication to virtually all
institutions and significant collectors that a bookseller possesses
those critical characteristics.

[§ 1.170A -17(b)(2)(i)(B) Recognized Professional Appraisal Organization
Designation]{.underline}

As noted above, no recognized professional appraisal organization
currently focuses primarily upon antiquarian books. Moreover, even
programs dedicated to evaluating personal property do not spend
appreciable time on antiquarian books, in part because instructors are
not antiquarian book specialists but also because the market is arcane
and small compared with other similar markets such as art and antiques.

Nonetheless, free market forces operate to identify those booksellers
best able to conduct appraisals. Knowledge, adherence to ethical
principles and experience are necessary to competently value antiquarian
books. Members of the ABAA must (1) meet the strictest competence
standards in the trade, (2) subscribe to a strong code of ethics, (3) be
sponsored by at least three existing members including one who must
visit the applicant's place of business to assess its standing, and, (4)
have no less than four years of bookselling experience that, by the
nature of the business, demands a thorough understanding of the
marketplace and the process for ascertaining antiquarian book value.

In the absence of a currently existing appraisal organization dedicated
to antiquarian books, the ABAA should be considered to be a recognized
professional appraisal organization for the book trade and admission to
membership into this select, well known and highly respected association
should constitute a designation for purposes of Internal Revenue Code §
170(f)(11)(E)(ii)(l). This would protect the US Treasury since the
ABAA's rigorous screening process ensures that members possess the
necessary credentials to earn qualified appraiser status.

Any other solution to the designation from a recognized professional
appraisal organization requirement would give birth to a very small
industry to provide antiquarian booksellers with professional
designations as qualified appraisers. Individual collectors and
institutions are not likely to benefit from such a development nor would
professional booksellers. But, additional costs would be imposed upon
antiquarian booksellers who almost universally work in their own small
businesses and who generally struggle for financial success. While some
or all of these costs may be recoverable through higher appraisal fees,
there is no certainty that they could be passed on or that appraisal
activity would not diminish as appraisals are deferred to future periods
in response to increased appraisal fees.

[§ 1. 170A - 17(b)(2)(A) Education Requirement]{.underline}

As previously noted, education requirements are problematic in the
antiquarian book industry owing to the absence of formal training
programs both at the college and professional levels. A very small
number of rare book classes are available commercially but all cover
technical aspects such as descriptive bibliography, the history of book
illustration, the history of bookbinding, etc. and none is dedicated to
valuation principles. Requiring antiquarian booksellers to attend
courses that may be created solely in response to new tax regulations
would impose hardships upon small businessmen and women who would be
required to take time from their day to day activities and would impose
substantial, new costs in the form of course fees, travel and meal
expense since, given the small size of the industry, classes could not
be held in convenient locations all over the country but undoubtedly
would meet in just a few cities.

Education, of course, is not acquired solely in the classroom. In the
case of antiquarian bookselling, the best education comes from working
in the field on a daily basis in a position responsible for pricing
decisions. Without a thorough understanding of pricing, an antiquarian
bookseller cannot sell successfully since books generally either will be
priced too high in which case they will not sell or too low in which
case inventory soon will be depleted. Similarly, the bookseller not well
versed in value will consistently overpay for inventory. "Bargains'
available to antiquarian booksellers are less common than in the past
owing to the increasingly transparent marketplace that permits easy
access to information via the internet. Now more than ever, owners
seeking to dispose of their antiquarian books have the capability of
understanding the fair market value of their property, and, often seek
to secure all of it via internet auction sites. While this recent access
to information creates both benefits and detriments to consumers and
owners of antiquarian books, it undoubtedly has increased pressure on
professional booksellers.

Proposed regulation § 1.170A -- 17(b)(2)(ii)(C) recognizes that "on the
job training" can satisfy the education requirement. Unfortunately,
since most antiquarian booksellers begin and continue as sole
proprietorships or small partnerships, this provision will be of limited
utility. I, however, believe that those very few antiquarian booksellers
large enough to rely upon this provision will be extremely grateful for
it.

Based upon the discussion above, I urge consideration of extending
satisfaction of the education requirement via "on the job training" by
including appropriate work activity such as responsibility for pricing
decisions. While verifying the scope of job responsibility may seem
difficult in concept, it generally should be easy in practice since the
vast majority of antiquarian book businesses are very small with no
employees or employment of a few people at most. The economic impact of
adopting such a standard would be nominal.

One approach, for example, could resort to an educational hierarchy. The
first level in the hierarchy would require successful completion of
coursework for appraisal fields where such coursework is readily
available and appraisers in those fields customarily complete such
training. Real estate appraisal is an example of one such field.

Where, however, coursework is not readily available in a field and
appraisers do not customarily complete coursework, satisfaction of
education requirements would be based upon work in the field for a
specified period of time. Antiquarian book appraisal is an example of
one such field. As just one possibility, the education requirement could
contain two components. First, the appraiser is required to have worked
full-time within the field for substantially all of a specified
consecutive year period, e.g., four years. Second, the appraiser is
required to have had substantial responsibility for pricing decisions
throughout that period. To illustrate, below is a revised §1.170A-17(b)
for your consideration:

> § 1. 170A - 17(b)(2) Education and experience in valuing relevant type
> of property. (i) In general. An individual is treated as having
> education and experience in valuing the relevant type of property
> within the meaning of paragraph (b)(1) of this section if, as of the
> date the individual signs the appraisal, the individual has - -
>
> \(A\) Successfully completed (for example, received a passing grade on
> a final examination) professional or college-level coursework (as
> described in paragraph (b)(2)(ii) of this section) in valuing the
> relevant type of property (as described in paragraph (b)(3) of this
> section), and has two or more years of experience in valuing the
> relevant type of property (as described in paragraph (b)(3) of this
> section);
>
> \(B\) Completed full-time employment in the field for a minimum of
> four (4) consecutive years during which time a substantial portion of
> such employment included pricing decisions for the relevant type of
> property (as described in paragraph (b)(3) of this section) but only
> if professional or college-level coursework (as described in paragraph
> (b)(2)(ii) of this section) is not readily available and appraisers of
> such property historically have not and customarily do not complete
> professional or college-level coursework; or
>
> \(C\) Earned a recognized appraisal designation . . .

Should a hierarchal approach of this sort be considered, I urge
inclusion of an example, perhaps along the following lines:

> Example - There are very few professional or college-level courses
> offered in valuing antiquarian books and it is customary for members
> of a well recognized and highly regarded association of antiquarian
> booksellers to appraise them. Appraiser A, a member of the highly
> regarded association, has worked in the antiquarian book industry on a
> full-time basis for four years. During that time, a substantial
> portion of Appraiser A's activity has been the determination of the
> fair market value of antiquarian books for purposes of establishing
> prices at which inventory will be offered for sale or determining
> acceptable prices for the acquisition of new inventory. Appraiser A is
> treated as having education and experience in valuing antiquarian
> books.

Please note that the ABAA already requires four years of active
antiquarian bookselling for admission. This requirement is a useful
benchmark and, in fact, may well be the appropriate standard for the
regulations to adopt. Four years is an eternity in one's own business
where the difference between success and failure depends in large
measure upon the antiquarian bookseller's understanding of valuation.
Similarly, employees working for four years in responsible positions
requiring pricing decisions also should satisfy the experience
requirements since there is "no place to hide" in this world of small
business where owners cannot afford to carry incompetent people.

Thank you for considering these comments. I am available during business
hours at (847) 482-0098 should you care to speak with me.

Very truly yours,

Bruce H. Barnett