T.C. M em o . 2 0 1 7 -1 6 5

UNITED STATES TAX COURT
PAUL A. GARDNER, Pet i t i o n er v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 1 4 6 95 -1 2
. Fi l edAu gu s t 2 4 , 2 0 1 7
.
Go rd o n Fai rl e M o o re, II, J o n at h anP. Rard i n, Ti ffan y W . Do n i o , an d Sco t t D. J aco b s o n , fo r p et i t i o n er. Dan i el C. M un ce an dBri an S. J o n es , fo r res po n d en t .

M EM ORANDUM FINDINGS OF FACT AND OPINION LAUBER, J u d g e: To p arap h ras e Ern es tHem i n g way , th ere i s n o h u nt i n g l i ke t h e h u n t i n g fo r t ax d educt i o n s . Pet i t i on er, an av i db i g -g am e h u n t er, t o o kth i s ad v ice t o h eart . In 2 0 0 6 h e o p t edt o d o wn s ize h is tro p h y co l lect i o n b y

d o nat i n g t o
an eco l o gi cal fo un d at i on m an y o f h i s l es s d es i rab l e h u n t i n g s p eci m en s . Rel y i n g- 2
-

[* 2 ] o n an ap p rai s al , h e cl ai m edu n d er s ect i o n 1 7 0 a ch ari tab l e co n t ri b u ti o n d educt i o n o f $ 1 , 4 2 5 ,9 0 0
. 1 Becau s e t h atam o u n tex ceed ed t h e m ax im u m al l o wab l e
as a d edu ct i o n fo r 2 0 0 6 , s ee s ec. 1 7 0(d )(1 )(A), h e l at er carri edth e b al an ce o f t h e d educt i o n t o 2 0 0 7 an d2 0 0 8
. Th e In t ern al Rev en u e Serv i ce (IRS o r res p o n d en t ) s el ect edp et it i o n er’ s 2 0 0 6 -2 0 0 8 return s fo r ex am i n at i o n . Itd et erm i n edth atth e v al u e o f t h e h u n t i n g
s p eci m en s h e h adco n t ri b u t edwas at m o s t$ 1 6 3,0 45 . Th e IRS acco rd i n g ly d et erm i n ed d efi ci en ci es o f $ 1 3 7 ,6 4 7 fo r 2 0 0 7 an d$ 2 7 4,2 2 8 fo r 2 0 0 8. W e m u s td eci d e t h e co rrect m et h od o l o g y fo r d et erm i ni n g t h e fai r m ark et
v al u e (FM V) o f p et it i o n er’ s h u n t i n g s p eci m en s . Sh o u l dwe u s e co m p arab l e s al es , as res po n d en tu rg es , o r rep l acem en tco s t , fo r wh i ch p et i t io n er ad v o cat es ? W e h av e n o d i ffi cu l t y

an s weri n g thi s qu es t i o n i n res p o n d en t ’ s fav o r.

FINDINGS OF FACT Th e p art i es s ubm it t edb efo re t ri al a s t ip u lat i o n o f fact s i n cl u d i n g ex h i b i t s th ati s i n co rp orat edb y

th i s referen ce. Pet it i on er res id edi n Pen n s y l v an i a wh en h e t i m el y pet i ti o n edth i s Co u rt .

1 Al l s t atut o ry

referen ces are t o th e In t ern al Rev en u e Co de (Co d e) as i n effect fo r t h e t ax y ears ati s su e. Al l Ru l e referen ces are t o th e Tax Co u rtRu l es o f Pract i ce an d Pro cedu re. W e ro u n dal l m o n et ary am o u nt s t o th e n eares td o ll ar.- 3
-

[* 3 ] I. Th e Do n at i o n Pet i t i o ner i s th e o wn er an dCEO o f s ev eral fam i l y -o wn edp ro p an e g as d i s t ri
b u t i o n co m

p an i es b as edi n Berwi ck , Pen n s y l van i a. He h as b een an ard en th u n t er fro m an earl y ag e; s i n ce t h e m i d -1 9 8 0 s h e h as reg u larl y trav el edo v ers eas t o p art i ci p at e i n s afari s. He h as h u n tedb i g g am e i n Afri ca, As i a, Eu ro p e (i n cl u d i n g Ru s s ia), an dSo ut h Am eri ca, an d t h ro u g ho u tth e Un i t edSt at es . He h as b een o n 2 0 t o 2 5 s afari s du ri n g th e l as t t wo y ears , a p ace t h atrefl ect s h is p rev i o u s ex p eri en ce. Ona t y p i cal h u n t i n g ex ped i t i o n p et i t i o n er wo u l d k i l l m u l t i p l e an i m al s . Fo l
l o wi n g a k il l the an im al was s o m et i m es s k i n n edo n th e s p o t, b ut was u s u al l y l o ad
edo n t o a v eh i cl e fo r t ran s p ort at i o n t o th e s k in n i n g s h ed . Aft er t h e an i m al was
s k i n n ed , th e m eatwas d i s t ri b u t edt o th e l o cal p o p ul at io n an dth e h i d e was p rep aredan ddri ed
. Li k e m an y

h un t ers p et i t i o n er p res erv edth e rem ai n s o f th e an im al s h e s h o ti n a “ tro p h y ro o m ” i n h i s h ou s e. In p et i t i o n er’ s wo rd s , a tro ph y ro o m i s a “ b i g , o p en
ro o m ” wi t h ap pro pri at e l i gh t i n g an dt em p erat u re an dh u m i di t y

co n t ro l s , i n wh i ch

“ y oucan an ch o r al l th e an i m al s t o th e wal l ” o r “ h an g s tu ff fro m the cei li n g.” Pet i
t i on er h ada p ro fes s i on al l y d es i g n edtro p h y

ro o m wi t h s p eci al l ig h t i n g t o el i m i n at e
s h ad ows , rei n fo rcedwal l s t o p ro v i d e b et t er an ch o ri n g fo r h eav i er m ou n t s , an dan i n s ectco n t ro l s y s t em .- 4
-

[* 4 ] In h i s t ro p h y

ro om p et i t io n er h ada n u m

b er o f “ fu l l b od y m o u n t s , ” i .e.,
co m p l et e t ax i d erm i edan i m al s, o ft en l y in g o n a ro cko r s i m i larl y d i s p l ay ed . He h ad m an y “ s h ou ld er m o u nt s,” wh ich co n s i s t ed o f t h e h ead s an d n eck s o f t h e
an i m al s d o wnt o th e b reas tp l at es . An dh e h ada v ari et y o f fu l l an i m al s k i n s d i s p l ay edas wal l h an g i n g s o r ru g s . Co l l ect i v el y , th es e are g en eral l y co n s i d ered th e m o s t at t ract i v e an dd es irab l e t y p es o f h u n ti n g t ro p h i es . Wh en a t ax id erm i s t d o es a “ fu l l b o dy m ou n t ,” h e g en eral l y d o es n o t u s e t he
s ku l l ; in s t eadh e creat es a m an n equ i n an dp u t s t h e s k i n aro u ndi t . Si m i l arl y , wh en a t ax i d erm i s td o es a “ s h ou l d er m o u n t ,” h e d o es n o tu s e h oo v es , b ack s k i n , o r o t h er b o dy p art s . An dwh en a t ax i derm i s tp rep ares a fu l l s k i n h e d o es n o tu s e s kel et al p art s , h o rn s, o r an t l ers . Pet i t io n er t hu s h adn um ero u s s ku ll s , an t lers , h o o v es , ears , h o rn s, an d o th er b o dy

p art s thatt ax i d erm i st s h adreturn edt o h i m aft er co m

p l et i n g th ei r wo rk . He d i s p l ay eds o m e o f t h es e i t em s o n co ffee t ab l es o r o n th e fl o o r o f h i s tro ph y

ro o m . Bu tth atfl o o r g o t“p ret t y cl u t t ered ,” an ds o h e s h i ft edm an y i t em s i n t o an ad

j o i n i n g ro o m . Fo l l owi n g a d i v o rce i n 2 0 0 5 p et it i on er m o v edt o a n ew res id en ce. He i m m ed i at el y b eg anb u i l di n g i n th ath o us e a n ew tro ph y ro o m , wh i ch was co m

p l et ed i n earl y 2 0 0 6 . Th attro p hy

ro o m h as s i n ce b een feat u redi n a h u nt i n g p ub l i cat i o n ,

“ Tro p h y Ro o m s Aro u n dth e W o rl d
. ”- 5
-

[* 5 ] Wh i l e co n t ract o rs were co m p l et i n g thei r wo rk

o n p et i t io n er’ s n ew t ro p h y
ro o m , h e wen tt o Can ad a t o h u n twh i t e-t ai l edd eer. On e ev en in g h e s tru ckup a
co n vers at i on wi t h an o th er h u n ter ab o u t d o wn s i zi n g h i s co l l ect i o n t o av o i d

“ o v ercro wd [i n g] th e n ew t ro p h y ro o m .” Hi s fel lo w h u n t er, wh o h ads u cces s fu l l y d eacces s i o nedu n wan tedan i m al s p eci m en s , s u g g es teda d o n at i o n t o th e Dal l as Eco lo g i cal Fo u nd at i o n (DEF), an o rg an i zat i o n ex em p t fro m t ax u n d er s ect io n 5 0 1 (a) an d(c)(3 ). 2 Th ath u n t er h adh im s el f d o n at eds p eci m en s t o DEF an dt o l d p et i t i o n er t h at“ h e kn ew al l t h e i n s an do ut s .” He ag reedt o “ h o okp et i ti o n er up
* * * wi th an ap prai s er n am edFu l l i n g t on .” Pet i t i o ner p ro m

p t l y co n tact edRi ch ardW . Fu ll i n g t o n , Ph .D., i n Ri ch ard s o n , Tex as . Fo l l o wi n g a “ g o o dco n v ers at i o n ” wi t h Dr. Fu l l i n g t o n , p et i ti o ner s el ect eda t o t al o f 1 7 7 i t em s fro m

h i s co l l ect i o n fo r d o nat i o n t o DEF. Th es e i t em s i n cl u d ed
n o fu ll b o dy

m o un t s an do n l y

th ree s h o u l d er m o u n ts (o n e o f wh i ch was a “ Eu ro p ean m o u n t ” feat uri n g ju s tth e an im al ’ s h ead ). Th e rem ai n i ng 1 7 4 i t em s co n s i s t ed
o f: 5 8 s k i n s an dh i d es , 7 2 s ku l l s (3 9 wi t h h o rn s o r an t lers ), 1 5 h o rn s , 1 5 an t l ers , 6 t ai l s , 5 s et s o f h o o v es , 2 ears , an d1 s eto f tu s k s .

2 Sh o rt l y aft er th e p art i es co m

p l et edp o s t -t ri al b ri efi n g i n th i s cas e, DEF ch an gedi t s n am e t o “ Ou t d o o rs To m o rro w Fo u n d at i o n .”- 6
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[* 6 ] No n e o f t h es e 1 7 7 s p eci m en s was o f “ reco rd b oo k ” qu al it y . Cert ai n h u n t in g
o rg an i zat i o n s m ai n t ai n reco rdb o o k s o f b i g -g am e k i l l s u s i n g p ro pri et ary s co ri n g
s y s t em s . A s peci m en m ay qu al i fy fo r l i s t i n g i n reco rdb o o k s o n th e b as i s o f t h e
an i m al ’ s s i ze o r o t h er feat u res , o r t h e an i m al ’ s u n u s u al p ro v en an ce. Th e t wo m o s t p ro m i n en treco rdb o o k s are co m p i l edb y t he Safari Cl ub In t ern at io n al (SCI) an d th e Bo o n e an dCro ck et tCl ub , res p ect i v el y . Atth e t i m e p et i t i o n er s el ect edth e 1 7 7
s p eci m en s fo r d o n at i on t o DEF, h e ap p ears t o h av e h adth ree k i l l s ran k edi n th e SCI reco rdb o o k . Bu th e d i d n o ts el ect an y s peci m en fro m t h o s e k i ll s fo r co n t ri
b u t i o n t o DEF. Pet i t i o ner en g ag edDr. Fu l l i n g to n t o ap p rai s e t h e 1 7 7 s p eci m en s , ag reei n g t o p ay $ 1 2 5 p er s p eci m en fo r a t o t al o f $ 22 ,1 2 5 . Dr. Fu l li n g to n’ s rep o rtd at ed Ap ri l 1 9 , 2 0 06 , u s edth e “ rep lacem en t co s t ” m et h o dt o d et erm i n e t he FM V o f th es e i tem s . He es t i m at edwh ati two u l dco s tt o rep l ace each i t em wi t h a s p eci m en
o f l i k e qu al i t y b y

t al l y i n g up t h e ex p ect edo u t-o f-p o ck etex p en s es fo r t rav el i n g t o th e h u nt i n g s i t e, b ei n g o n s afari fo r t h e req u i s i t e n u m b er o f d ay s, k i l l in g t h e an i
m al , rem o v i n g an d p res erv i n g th e g iv en b o dy p art , s h i p p i ng i tb ack t o the Un i t ed St at es , an d d efray i n g th e t ax i d ermy co st s o f s tu ffi n g , m o u n t i n g , o r o t h erwi s e p rep ari n g th e i t em

fo r d is p lay . He co n s i d ereds u ch fact o rs as “ t h e p ro rat edu n i tco s t , s h i p p i n g fees , t ax i d ermy

fees , an d p erm i t/ t ro p h y

fees .” Atth e t i m e h e d raft edh i s- 7
-

[* 7 ] ap p rai s al Dr. Fu l l i n g to n knew t h atp et i t i o n er i n ten d edt o cl ai m a ch ari t ab l e
co n tri b u t i o n d edu ct i o n fo r t h e 1 7 7 i t em s . Dr. Fu l l i n g t on ’ s rep o rt , wh i ch was at t ach edt o p et i t i o n er’ s 2 0 0 6 Fed eral i n co m e t ax retu rn , co n t ai n s a s ep arat e s h eetfo r each o f th e 1 77 s p eci m en s . Each
s h eeti ncl u d es a p ho t o g rap h o f t h e s p eci m en . Bel o w th e p h o t o g rap h i s a s u m m ary th atl i s t s th e St at e o r fo rei g n co u n t ry i n wh i ch th e an im al was k i ll ed(i f kn o wn )
an d p ro v i d es an es t i m at e o f the s p eci m en ’ s qu al i t y (i n v ari ab ly

d es cri b edas “ ex cel
l en t ”). Th e s u m

m ary i n cl ud edn o o th er i n fo rm at i o n ab o u tth e s p eci m en ’ s “p ro v en an ce.” Atth e b ot t o m

o f each s h eetwas Dr. Fu l l in g to n ’ s ap prai sal o f t h e s p eci m en ’ s
v al u e. Us i n g h i s “ rep l acem en tco s t ” ap p ro ach , h e v al uedth e t an neds k i n o f a Cen
tral As i an s h eep at$ 75 ,6 00 o n th e t h eo ry thati two u ld co s tth atm u ch t o b ag an o th er s i m i l ar s heep . Onth e s am e t h eo ry h e v al ueda Eu ro p ean m ou n t o f t he h o rn s
o f a d es ertb ig ho rn s h eep at$ 5 6 ,8 0 0 . Acco rd i n g t o Dr. Fu l l i n g t o n , th e FM V o f th e 1 7 7 s p eci m en s was $ 1 ,4 25 ,9 00
. Dr. Fu l l in g t o n al s o arran g edt o h av e th e s peci m en s d el i v eredt o DEF, ap p aren t l y du ri n g M arch 2 0 06 . Ina l et t er d at edAp ri l 2 6 , 2 0 0 6 , DEF th an k edp et i t i o n er fo r h i s “ co n t ri b u t io n o f 1 7 7 tro p h y an im al s .” (Pet i t i o n er d i dn o ti n fact d o n at e 1 7 7 tro p h y an i m al s ; b y h i s ad m i s s i o n , th e 1 77 s p eci m en s wo u ldh av e co m e fro m far- 8
-

[* 8 ] fewer t h an 1 7 7 an i m al s.) Pet i t i o ner h as n ev er v i s i t edDEF an dd o es n o tkn o w wh et h er DEF ev er ex h i bi tedan y o f t h e i t em s . Pet i t i o n er d i dn o tcal l an y wi t n es s fro m DEF t o t es t i fy . Th e ev id en ce es t ab li s hedth atth e 1 77 s p eci m en s “ h adb een
s ub s equ en t l y

d i s p ers ed ”; DEF ap p aren t l y p u tth e d o n at eds p eci m en s i n s to rag e
an d l at er s o l dth em o r g av e t h em away . 3 Dr. Fu l l in g t o n d i dn o tt es t i fy attri al . Becau se t he 1 7 7 d o nat eds p eci m en s h ad b een d is p ers edt o u n kn o wnl o cat i o n s an d were n o l o n g er acces s i b l e, n on e o f th e ex p ert s wh o t es t i fi edattri al was ab l e t o co n du cta p h y si cal i n sp ect i o n t o as s es s th e s p eci m en s’ qu al i ty . Th e ex p ert s ’ qu al i t y as s es s m en t s thu s h adt o b e b as edo n Dr. Fu l li n g t o n ’ s p h o t o g rap hs , wh i ch were s m al l i n s i ze an do f p o o r res o lu t i o n . II. Th e Dedu ct i o n Rel y i n g o n Dr. Fu l l i n g t on ’ s ap p rai s al p et i t i on er rep o rt edo n h i s 2 0 0 6 ret u rn a ch ari t ab l e co n tri b ut i o n o f $ 1 ,4 2 5 ,9 0 0 . Sect i o n 1 7 0 (b )(1 )(C)(i ) cap p edh i s d edu ct i o n at3 0 % o f h i s ad

ju s tedg ro s s i n co m e fo r 2 0 0 6 ; h e th u s cl ai m eda d edu ct i o n

3 Res p o n d en ts o u g h tt o i n t ro duce ev i den ce p u rp o rt i n g t o es t ab l i s h t h atDEF u l t i m at el y

d es t ro y ed s peci m en s th atwere n o ts al ab l e, d o n at edo t h ers t o a t ax i d erm y s ch oo l , an d g av e t h e res t t o a wo m en ’ s au ct i o n t o m ak e p i l l o w s , ch ai rs , an d s t oo l s . Th i s p ro ffer t o o kth e fo rm o f a d ep o si t io n o f a cu rren tDEF o ffi cer wh o d i d n o tt es t i fy

attri al , t o wh ich p et i t i o n er o b ject ed o n h ears ay

g ro u n d s . Becau s e we fi ndth e t ri al t es t i m o n y

o f res po n d en t ’ s ex p ertd i s p os i t i v e wi t h res p ectt o t h e s p eci
m en s ’ FM V, the p ro ferred ev i den ce, ev en i f rel ev an tan do t h erwi s e ad m i s s i b l e, h as n o i ncrem en t al p ro b at i v e v al u e. Fi nd i ng i t“ n eed l es s l y * * * cu m

ul at i v e,” Fed
. R. Ev i d . 4 0 3 , we d ecl i n e t o co n s i d er t h i s ev i den ce.- 9
-

[* 9 ] o f $ 1 2 9 ,4 59 fo r t h aty ear. Sect i o n 1 7 0 (b )(1 )(C)(i i ) al lo wed h im t o carry fo rwardth e ex ces s co n t ri bu t i o n i n t o th e n ex tfi ve t ax y ears . Inrel i an ce o n t h at p ro v is i o n h e d edu ct ed$ 42 9 ,3 1 3 i n 2 0 0 7 an dan o t h er $ 78 3 , 5 0 9 i n 2 0 08
. 4 Du ri n g ex am i n at i o n o f p et i t i o n er’ s 2 0 0 6 -2 0 0 8 return s an IRS s t aff ap p rai s er d et erm i n edth e ag greg at e FM V o f t h e 1 7 7 s p eci m en s t o b e o n l y $ 16 3 , 0 4 5 . Th at FM V, wh i l e s u ffi ci en t t o co v er p et i t i o n er’ s cl ai m edd edu ct i o n fo r 2 0 0 6 , l efto n l y $ 3 3 ,5 8 6 t o b e carri edfo rward . Th e IRS acco rd i n gl y i s s u edp et i ti o n er a t i m el y
n o t i ce o f d efi ci en cy

th atd i sal lo wed$ 3 9 5 , 8 00 o f t h e d edu ct io n h e h adcl ai m edfo r 2 0 0 7 5 an dth e en t i re $ 7 8 3 ,5 0 9 d edu ct io n h e h adcl ai m edfo r 2 0 0 8 . Refl ect i n g th o s e ad ju s t m en t s , th e n ot i ce d et erm i n edd efi ci en ci es o f $ 1 3 7 ,6 4 7 an d$ 2 7 4 ,2 2 8 fo r 2 0 0 7 an d 2 0 0 8, res p ect iv el y . OPINION Th e IRS’ d et erm i n at i o ns i n a n o t i ce o f d efi ci en cy are g en eral l y

p res u m ed
co rrect , th o u g h th e t ax pay er can reb u tth i s p res um p t i o n . Ru l e 1 4 2 (a); W el ch v . Hel v eri n g , 2 9 0 U.S. 1 1 1 , 1 15 (1 9 33 ). Th e t ax pay er b ears th e b urd en o f p ro v i n g

4 Th e d edu ct i o ns p et i t i o n er cl ai m edfo r 2 00 6 -2 0 0 8 t ot al $ 1 , 3 4 2 ,2 8 1 . He p res u m ab l y carri edt o 2 00 9 th e rem ai n i n g b al an ce o f $ 83 ,6 1 9 , wh ich i s n o tb efo re u s .

5 It ap p ears th atth e d i s al lo wan ce fo r 2 0 07 s h o u l dh av e b een $ 3 95 ,7 2 7 (i .e., $ 4 2 9 ,3 1 3 –

$ 3 3 ,5 8 6 ). Th e reco rdd oes n o tex p l ai n th e $ 73 d i screp an cy , an dt o res o l ve i twe wi ll o rd er a Ru l e 1 5 5 co m p u t at io n .- 1 0 -

[* 1 0 ] h i s en t i t l em en tt o d edu ct i o n s al lo wed b y th e Co d e an do f s ub st an t i at i n g the
am ou n t s o f cl ai m edd edu ct i o ns . INDOPCO, In c. v . Co m m i s s i o n er, 5 0 3 U.S. 7 9 , 8 4 (1 99 2 ); s ec. 1
. 60 0 1 -1 (a), In co m e Tax Reg s . Incert ai n ci rcu m st an ces the b u rd en o f p ro o f o n fact u al i s s u es m ay s h i ftt o th e Co m

m i s s io n er. See s ec. 7 4 9 1 (a); Ru l e 1 4 2 (a). Pet i ti on er d o es n o tco n t en dth atei t h er p ro v is i o n ap p l i es h ere. He th u s b ears th e b u rd en o f p ro v i n g th ath e i s en t it l edt o th e d educt i o n s h e cl ai m ed
. I. Go v ern in g Leg al Pri n ci pl es Sect io n 1 7 0 (a)(1 ) al lo w s a d educt i o n fo r an y ch ari tab l e co n t ri b u t i on m ad e wi th i n th e t ax y ear, s ubjectt o th e an n u al l im it at i o ns d i s cu s s ed p rev io u sl y . If t h e t ax p ay er m ak es a ch ari t ab l e co n t ri b ut i o n o f p ro p ert y o t h er t h anm o n ey , th e am o u n t
o f t h e co n t ri b u t i o n i s g en eral l y equ al t o th e FM V o f t h e p ro p erty atth e t i m e t h e g i fti s m ad e. See s ec. 1 .1 7 0A-1 (c)(1 ), In co m e Tax Reg s . Th e p art i es ag ree t h at p et i t i o n er s at i s fi edth e v ari ou s p ro cedu ral req u i rem en t s ap p l icab l e t o h i s g i ft , i n cl u d i n g th e n eedfo r a “ qu al i fi edap p rai sal .” See s ec. 1 7 0 (f)(8 ), (1 1 )(D); s ec. 1 .1 70 A-1 3 (c)(3 ), (5 ), In co m e Tax Reg s. Th e p art i es ’ s o l e d i s ag reem en tco n cern s th e FM V o f t he 1 77 s p eci m en s . Pet i t i o n er i n s i s t s o n a v al u e atl eas tas h ig h as th e $ 1 ,4 2 5 ,9 0 0 fi g ure t h at Dr. Fu l l i n g t o n d et erm i n ed , wh il e res p o n d en targ u es fo r t he $ 1 6 3 ,0 4 5 v al uat i o n s etfo rt h i n t h e n o t ice o f d efi ci en cy .- 1 1 -

[* 1 1 ] Th e reg u l at i on s d efi n e FM V as “ t h e p ri ce atwh i ch th e p ro p ert y wo u l d ch an ge h an d s b et ween a wi l l i n g b u y er an da wi l li n g s el l er, n ei t h er b ei n g u n d er an y
co m p u l s i o n t o b u y

o r s el l an db o t h h av in g reas o n ab l e kn o wl ed g e o f rel ev an t fact s.” Sec. 1 .1 7 0 A-1 (c)(2 ), In co m e Tax Reg s. Det erm i ni n g t h e FM V o f d o n at ed p ro p erty en t ai l s a fact u al i n qui ry . Es t at e o f DeBi e v . Co m m i ss i o ner, 5 6 T.C. 8 7 6 , 8 9 4 (1 97 1 ). Pet i ti o ner b ears th e b u rd en o f p ro v i n g th e FM V o f t h e d o n at edi t em s . To s up p o rtth ei r res p ect i v e p o s i t i o n s th e p art ies ret ai n edex p ert s wh o t es t ifi edat tri al . An ex p ertwi tn es s ’ o p i n i o n i s ad m i s s ib l e i f i tas s i s t s th e tri er o f fact t o
u n d ers t an dth e ev i d en ce o r t o d et erm i n e a facti n i s s ue. Fed . R. Ev i d . 7 0 2 . W e
ev al u at e an ex p ert ’ s o pi ni o n i n l i g hto f h i s qual i fi cat i o ns an dth e ev i d en ce i n th e
reco rd . See Park er v . Co m m i s s i o n er, 8 6 T.C. 5 4 7 , 5 6 1 (1 9 8 6 ). Wh en ex p ert s
o ffer d i fferi n g es t i m at es o f FM V, we wei g h th o s e es t im at es b y ex am i ni n g (am o ng
o th er t hi n g s ) t h e fact o rs t h ey co n s i d eredi n reach i ng th ei r co n cl u s i o n s. See Cas ey
v . Co m m i s s i o n er, 3 8 T.C. 3 5 7, 3 8 1 (1 9 6 2 ). W e are n o tb ou n db y

an ex p erto p i n i on th at we fi n dco n t raryt o o ur ju d g m en t . W e m ay

accep tan ex p ert ’ s o p i n i o n i n i t s en t i ret y , o r we m ay b e s el ect i v e as t o the p o rt io n s we fi n d rel i ab l e. See Hel v eri n g v . Nat ’ l Gro ceryCo ., 3 0 4 U.S. 2 8 2, 2 9 5 (1 93 8 ); Park er, 8 6 T.C. at5 6 1 -5 6 2; Bu ffal o To o l & Di e M fg . Co . v . Co m m i s s i o n er, 7 4 T.C. 4 41 , 4 5 2 (1 9 8 0 ). W e m ay al so d et erm i n e FM V o n th e- 1 2 -

[* 1 2 ] b as i s o f o u r o wnex am i n at i o n o f t h e reco rdev i d en ce. See Si l v erm anv . Co m m i s s i o n er, 5 3 8 F.2 d9 2 7 , 9 3 3 (2 dCi r. 1 9 7 6 ), aff’ g T.C. M em o . 1 97 4 -2 8 5
. II. Ex p ertTes t i m o n y Th e p art i es ’ d i s p u t e b o i l s d own t o a qu es t i o n o f v al u at i o n m et h o do l og y . Res po n d en tu rg es t h at we d et erm i n e t h e FM V o f t h e 1 7 7 s p eci m en s b y co n s i d eri n g m ark etp ri ces fo r co m p arab l e i t em s . Pet i t i o n er i n s i s t s th at t h e i t em s h e g av e DEF are m

u s eu m -qu al i ty

h u nt in g s p eci m en s en d o wedwi t h s p eci al v al u e fo r s tu dy
an d res earch , th atth ey

h av e n o tru e co m

p arab l es i n th e o pen m ark et , an dth atwe
m u stacco rd i n g l y

d et erm i ne t h ei r v al u e b y es t i m at i n g wh ati t wo u l dco s tt o rep l ace th em . In d eci d i ng wh o i s ri g ht , an i m p o rt an t fact o r i s wh et h er th e i t em s are “ co m m o di t i es ” o r “ co l l ect ib l es .” If a h u n t i n g tro p hy i s p ro p erl y

co n si d ereda co l l ect i b l e, i twi l l m at t er wh o s h o t th e an i m al , p reci s el y wh ere i twas s h ot , an dwh i ch
co l l ect o rs o wn edi tp rev io u s l y . Th e “ pro v en an ce” o f t h e i t em s , b y co n t ras t , wi l l b e l arg el y i rrel ev an ti f t h ey are v al u edas co m m o d it i es . Inth atcas e t h ei r v al u e, l i ke t h e v al u e o f s t eel , s u g ar, o r o t h er co m m od i t i es , can b e d et erm i n ed(as s u m i n g th e ex i s t en ce o f a reas o n ab l y act i v e m ark et ) b y

co n su l t i n g th e p ri ces th atco m p arab l e i t em s fet ch i n th e m ark etp l ace. W e h av e n o d i ffi cu l t y co ncl u d i n g t h atth e 1 7 7- 1 3 -

[* 1 3 ] s p eci m en s were co m m od i t i es an dth atres p o n d en t’ s m ark etp ri ce ap p ro ach
s up p li es th e p ro per m et h o d ol o g y fo r as cert ai n i n g th ei r v al u e. Al th ou g h p et i t i o n er at t ach edt o h i s 2 0 0 6 t ax retu rn a co p y o f Dr. Fu l l i n g t o n ’ s rep ort , h e d id n o ten g ag e Dr. Fu l l i n gt o n as an ex p erto r s eekt o m o ve h i s rep o rti n t o ev i d en ce. Th atrep o rti s p arto f t h e reco rdfo r th e s o l e p u rp o s e o f d em o n s trat i n g p et i t i o n er’ s co m

p l ian ce wi t h t h e s ub st an t i at i o n req ui rem en t o f s ect i o n 1 7 0 (f)(1 1 )(D). Ho w ev er, b ecau s e p et i t i o n er’ s s peci m en s were d el i vered t o DEF a d ecad e ag o an d“ h adb een s ubs equ en t l y d is p ers ed , ” t h ey were n o l o n g er av ai l ab l e fo r i n s pect i o n . Of n eces s i t y , th erefo re, b o t h s i d es ’ ex p ert s rel i ed o n Dr. Fu l l i n g t o n ’ s ap p rai s al fo r an i n v en t o ry o f t h e i t em s an d p h ot o g rap h s o f al l 1 7 7 s p eci m en s . It is th u s u s efu l t o co n s i d er atth e o u t s etth e co n ten t s o f h i s Ap ri l 2 0 0 6 rep ort . Th atrep o rtl eav es m

u ch t o b e d es i red . Itco rrect ly n o t es th atn o n e o f t h e
s p eci m en s h ad“ reco rdb o o k ” s t atu s . Itacco rd s each i t em a rat i n g fo r “ s p eci m en qu al i ty ” an d “ t ax i dermy

qu al i t y .” Al t h o ug h Dr. Fu ll i n g t o n g av e ev ery s i n g l e i t em a rat i n g o f “ ex cel l en t ” o n b o t h s co res , the p h o t o g rap h s o ft en s u g g es tthata l o wer rat i n g wo u l dh av e b een ap pro p ri at e. Hi s en tri es u n der t he “ p ro ven an ce” cat eg o ry
are m eag er; th e o nl y

i n fo rm at io n h e p ro vi d es i s th e St at e o r fo rei gn co u n t ry i n wh i ch th e an i m al was k i l l ed . Each en t ry i s fo l l o w edb y

a fo rwards l as h an dth en th e wo rd “ u n kn o wn ,” s u g g es t i ng th atDr. Fu l l i n g to n m ay h av e l ack ed co n fi d en ce- 1 4 -

[* 1 4 ] i n th e s p eci m en ’ s act u al p ro v en an ce, ev en atth ath i gh l ev el o f g en eral i t y . Dr. Fu l li n g t o n s upp l i ed n o ev i d en ce t o s up p o rtth e p rem is e fo r h i s ad o p ti o n o f a

“ rep l acem en tco s t ” ap p ro ach , i .e., th at“ t h ere are n o equ i tab l e co m p arab l e s al es ” fo r an y o f t h e 1 7 7 s peci m en i t em s . A. Res p o nd en t ’ s Ex p ert Res p o n d en to ffered an dwe reco g n i zedFo rres tKet n er as an ex p erti n t ax i
d ermy an dth e ap p rai s al o f t ax i d ermy i t em s . He h as b een i n vo l v edwi t h th e t ax i
d ermy trad e fo r m o re th an 3 0 y ears . He o wn s an do p erat es a b u s i n es s t h ats tu ffs
an d m o u n t s b i rd s , fi s h , an ds m al l an dl arg e m amm al s fo r d i s p l ay o r s tu dy . He i s a l i cen sedt ax id erm i s t , h as t au g htt ax id ermy cl as s es , an dh as au t ho redb o o k s o n th e
s ub ject
. Si n ce 2 0 1 3 M r. Ketn er h as b een a cert i fi edap p rai s er s p eci al i zi n g i n t ax i
d ermy i t em s . He h as co n du ct edatl eas t2 0 ap p rai s al s fo r i n s u ran ce p u rp o ses an d fo r v al u i n g tro p hy

m o un td on at i o n s . He h as b een ret ai n ed t o co n ductt ax i d ermy ap p rai s al s b y

m us eu m s, St at e an dl o cal g o v ern m en t s , an dth e IRS. He i s t h e o n ly
ex p ertth atwe reco gn i zedattri al as an ex p erti n t ax i d ermy an d t h e ap prai s al o f t ax i d ermy

i t em s . M r. Ket n er p rep aredan ap p rai s al rep o rtth atu s edth e m ark etap p ro ach t o d et erm i n e t h e FM V o f t h e 1 7 7 an i m al s p eci m en s . Onth e as s u m p t i on th at each- 1 5 -

[* 1 5 ] s p eci m enwas i n ex cel l en tco n d i t i o n, as Dr. Fu ll i n g t o n h adas s ert ed , M r. Ket n er d et erm i n edth e ag g reg at e FM V o f th e 1 77 s p eci m en s t o b e $ 4 1 , 1 4 0
. Ex am i ni n g th e p h o t o g rap hs , h o wev er, M r. Ket n er o b s erv edwh ath e b el iev edt o b e d efect s i n m an y

i tem s. Tak i n g th es e d efect s i n t o acco u n t , h e redu cedh i s ap p rai s ed
v al u e t o $ 3 4 ,2 4 0
. 6 M r. Ket n er’ s t es t i m o ny , wh i ch we fo un dcred ib l e an dco nv i n ci n g , ch aract eri zed th e d o nat eds p eci m en s as co ns i s ti n g m o s t ly o f “ remn an t s an d s crap s ” o f a tro p h y co l l ect i o n . “ It ’ s wh at ’ s l efto v er wh eny o u ’ re d o n e m o u nt i n g an an i m al ,”
o r wh ati s “ n otn eed edfo r wh at ’ s h an g i ng o n the wal l .” Hi s rep o rtn o t edth atth e
s p eci m en s i n cl u ded2 9 p art i al s k i n s o r b ack s k i n s , wh i ch are p o rt io n s o f t h e h i d e l efto ver aft er a s h o u l d er m o un t . M an y o f t he s ku l ls , t ai l s , an d h o ov es were l i k ewi s e l eft -o v er i t em s . He ap p rai s ed1 9 t an n eds k i n s ata l o w v al u e, n o t i n g t h ei r ad v an cedag e atth e t i m e o f d o nat i o n , wh i ch l i k el y ren d eredth em

u n ab le t o h o l d
s t it ch es fo r p urp os es o f m o u n ti n g . He n o t ed t h at1 0 o f t he an t l ers co m p ared
u n fav o rab l y

i n s i ze wi th m o stan t l er t ro p h i es av ai l ab l e fo r p u rch as e o n t h e o p en

6 Al t h o ug h M r. Ket n er’ s b es t -cas e FM V es t i m at e cam e i n wel l b el o w th e $ 1 6 3 ,0 4 5 v al ue refl ect edi n th e n o t i ce o f d efi ci en cy , res p o n d en th as n o t s o u g h tt o am en dh i s an s w er t o as s ert an i n creas edd efi ci en cy . Rat h er, h e “ h as g i v en p et i
t i on er t h e b en efi to f t h e $ 1 6 3 ,0 4 5 d edu ct io n o ri g i n al l y al l owed .”- 1 6 -

[* 1 6 ] m ark et . He as cri b ed a l o w v al u e t o two fu l l Am eri can b ear s k i n s b ecau s e o f
v i s i b l e p at ch es o f m i s s i n g fu r. To d eri v e co m

p arab l es fo r t h e 1 7 7 d o n at eds p eci m en s M r. Ket n er co n s u l t ed
m ark etd at a fro m

b ri ck s -an d-m o rt ar au ct io n h o u s es , o n l i n e au ct i o n s i t es (s u ch as eBay ), an do t h er web s i t es s p eci al i zi n g i n h u n ti n g s p eci m en s s i m i l ar t o t h o s e i n v o l v edh ere. He o p i n edth atth ere “ h as al way s b een a m ark et ” fo r s u ch i t em s . Hi s t o ri cal l y , “ [t ] ax i d erm i s t s wo u l db u y , s el l , s wap , o r t rad e th es e i tem s as th ey
were n eed ed* * * t o co m pl et e p ro j ect s , o r t o m ou n t fo r t h ei r o wn co l l ect i on s .” M o re recen t l y , wi t h th e p ro l i ferat i o n o f o n l i n e au ct i o n s i t es , b u y ers an d s el l ers i n cl u d e t h e g en eral p ub l i c rat h er th an ju s tth e t ax i d erm i s tco m m u ni t y . Th e m ark et fo r s u ch i t em s n o w i s “ wi d e o p en , ” wi t h few i f an y b arri ers t o en t ry . Fo r each o f t he 1 7 7 s p eci m en s , M r. Ket n er s o u g h tt o i d en ti fy th e b es tav ai lab l e co m p arab l es o n t h e b as i s o f s ize an d qu al i ty . Fo r s o m e i t em s h e fo u ndas
m an y as 1 0 o r 2 0 co m

parab l es , i n wh i ch ev en t h e s el ect edo n e i n th e m i d d l e. Fo r
s o m e i t em s h e fo u n do n ly tw o co m parab les ; i n t h atcas e h e g en eral l y t o o kth e av erag e. Al l i n al l , h e fo u nd5 0 4 co m parab les fo r t h e 1 7 7 s p eci m en s . He ackn o wl ed g edth atal l b u t fo u r o f h i s co m p arab l es were fro m

y ears aft er 2 00 6 , b u tcred
i b l y t es t i fi edth atth ey were n ev ert hel es s s i m i l ar b ecau s e “ [t ] he m ark et h as n ’ t ch an gedm

u ch i n th e l as t1 0 y ears .” In h is reb u t t al rep o rt h e m ad e ad ju s t m en t s t o- 1 7 -

[* 1 7 ] acco u n tfo r d i fferen ces i n v al u e ch aract eri s t i cs b et ween th es e co m p arab l es
an d th e 1 7 7 d o n at eds p eci m en s t o arri v e ath i s fi n al FM V d et erm in at io n . B. Pet i t i o ner’ s Ex p ert s Pet i t i o ner’ s fi rs ttwo ex p ert s were An i b al Ro dri g u ez an dVi ct or W i en er. Nei th er as s i g n eda d o ll ar v al u e t o th e 1 7 7 s peci m en s ; rat h er, each s o u g h to n l y t o d efen d “ rep l acem en t co s t ” as th e p ro p er v al u at i on m et h o d o l og y . Th e t h ru s to f th ei r t es t i m o n y

was th atM r. Ket n er’ s m ark etap p ro ach co u l dn o tcap tu re t h e FM V
o f t h e 1 7 7 s p eci m en s b ecau s e t h ey were m u s eu m -qual i ty

p i eces u ni quel y

v al u ab l e fo r res earch . Nei t h er M r. Ro dri g u ez n o r M r. W i en er p ro v i d edan y fact u al s up p o rt fo r t h i s t h eo ry , an dwe fo u n dth ei r t es t i m o n y wh o l l y u n rel i ab le. M r. Ro dri g uez ret i red aft er 3 7 y ears as a t ech n i cal co n s u l tan ti n t h e an t h ro p o l o g y d iv i s i o n o f t h e Am eri can M u s eu m o f Natu ral Hi st o ry

i n New Yo rk . He i s
n ei th er an ap p rai ser n or a t ax i d erm i s t. He h as n ev er h un t edan i m al s an dh as n ev er b o u g h to r s o l di t em s l i ke t h os e ati s s u e h ere. W e reco g n izedh i m as an ex p ert
m u seu m t ech n ici an fam i l iar wi t h the m an n er o f as s em b l i n g m u s eu m co ll ect i o n s . M r. Ro dri g uez t es t ifi edth at t h e m o std es i rab l e h u n t i n g s peci m en s fo r a mus eu m co l l ect i o n wo u ldb e “ fu l l y d o cu m en t ed s peci m en s th at were n o t co m pro m i s edb y ch em i cal treat m en t s an dh adth e p ro p er l i cen s es an dkno wnp ro v en an ce.” Gi v en th e d em an d s o f an t h ro p o l og i cal res earch , M r. Ro dri g u ez s t at edth at- 1 8 -

[* 1 8 ] a rep u t ab l e m

u s eu m wo u l dn o rm al l y

accep td on at i o n s o f an i m al s p eci m en s
o n l y i f th ey were acco m

pan i edb y d et ai l ed p ro v en an ce i n fo rm at io n , i n cl u d i n g the p reci s e l ocat i o n wh ere t he an i m al was h u n t ed , th e n atu re o f t hath ab i t at , th e
m et h o d b y wh i ch th e an i m al was h u n t ed , an dth e h eal t h o f t h e an i m al atth e t i m e i t
was t ak en . “ M us eu m s cu rat e t hes e m at eri al s ,” h e s t at ed , “ an d m ak e t h em av ai l ab l e t o res earch ers as n eed ed .” M r. Ro dri g uez o p i n edth atth e s p eci m en s p et i ti o n er d o n at edt o DEF wo u l d b e “ i ncred ib l y

v al u ab l e t o m

u s eu m co l l ect i o n s .” Th atwas as s ert ed l y s o b ecau s e
o f t h ei r “ h i g h qu al i t y

an dkn o wnp o i n t s o f o ri g i n an do t h er i n fo rm at io n as s o ci at ed wi th th em .” W e fo u ndth is as sert i o n d ev o i do f an y fact u al fo u n d at i o n. Oncro s s -ex am i n at io n M r. Ro dri g u ez ad m i t t edth atth e Fu l l i n g to n rep o rt
was h is s o l e s o u rce fo r p ro v en an ce i n fo rm at i on ab ou tth e 1 7 7 s p eci m en s . Th at rep o rtd o es n o tes tab l i s h th e “ h i g h qu al i t y ” o f th e s peci m en s ; th e p ho t o g rap h s
o ft en s h o w th e co n t rary . Th atrep orti s l i k ewi s e weak o n “p ro v en an ce”: Itl i s t s
m erel y th e St at e o r co u n t ry

o f t h e k i l l fo l l o wedb y

th e wo rd“ u n kn o wn .” Iti n cl u d es n o d et ai l s reg ard in g the g eo g rap h ical co o rd i nat es , cl i m at e, o r v eg et at i o n o f th e p l ace wh ere t h e an i m al was k i l l ed , n o r an y i n d i cat i o n as t o the h eal t h o f t h e
an i m al . Iti n cl ud es n o “ o th er i n fo rm at i o n as s o ci at ed wi t h ” t h e s p eci m en s . Ith as
n o i n fo rm at i o n as t o wh eth er t h e an i m al s were h un t ed p u rs u an t t o “p ro p er l i
-- 1 9 -

[* 1 9 ] cen s es ,” o r wh eth er reco rd s o r cert i fi cat es o f au t h en t i ci t y ex is tfo r an y o f t h e
s p eci m en s . An di tm ak es cl ear t h atm an y o f t h e s p eci m en s (i ncl u d in g t an ned
s k i n s ) h adb een s ub

jectt o ch em i cal s as p arto f th e t ax i d ermy p ro ces s. In s ho rt , M r. Ro dri g uez as su m edwh at h e h adu n d ert ak en t o p ro v e. He t es t i fi edas t o wh atfeat ures m u s eu m -qu al i t y

h u n ti n g s p eci m en s s h o u l dd i s p l ay . He t h enas s ert ed , wi t h n o fact u al b as i s wh at s o ev er, t h at p et i t io n er’ s 1 7 7 s p eci m en s d i s p l ay edth os e featu res . M r. W i en er i s an arth is t o ri an an dan ap prai s er s p eci al i zi n g i n th e d eco rat i v e
an d fi n e art s . W e reco g ni zedh i m as an ex p erti n ap p rai s al an d ap p rai s al m et h o d
o l o g i es . He ackn o wl ed gedthath e h as n o ex p ert i s e i n ap p rai s i n g h u nt i n g s p eci
m en s , an dh e o ffered n o o p in i o n as t o wh atth e FM V o f t he 1 7 7 s p eci m en s was . He n ev ert h el es s i ns i s t ed , wi t h n o d i s cern i b l e fact u al s upp o rt , th atth e “ rep lacem en t
co s t ” ap p ro ach u rg edb y

p et i t i o n er was th e “ m os tap p ro p ri at e” m et h o dt o d et erm i n e FM V. To b eg i n wi t h , i ti s d i ffi cu l tt o co n s id er M r. W i en er’ s ex p ertt es t i m o n y an d
co n cl u s i o n as h i s i n d ep en d en to p i n i o n . He ch aract eri zed M r. Ro dri g u ez’ s rep o rt
as “ a cri t i cal an al y s i s ” o f t h e Fu l l i n gt o n rep o rtan dad m it t edth ath e h adrel i edo n th e “ Ro dri g u ez rep o rtfo r [h i s ] o p in i o n .” An d h e ad d edth ath e h adal s o co n s u l t ed- 2 0 -

[* 2 0 ] wi th p et i t io n er. Wh en as k edwh et h er h e was rel y i n g o n M r. Ro dri g u ez’ s
an d p et i t i o n er’ s o p in i o n s , h e res p o n d ed : “ I m o s t cert ai nl y am .” M r. W i en er’ s rep o rtd is p l ay s n u m ero u s erro rs o f l o g i c an dfact . He o p i n es th at“ [w] i t h th e ex cep t io n o f two t ax i d ermy s h eep h ead s , th e s p eci m en s are p res erv edi n a n atu ral st at e, b efi tt i n g a s tu dy co l lect i o n .” Bu t o n cro s s -ex am i n at i o n , h e ad m i tt edn o tkn owi ng wh at “p res erv edi n a n atu ral s t at e” m ean s . He co n ced ed th atm an y , i f n o tal l , o f t h e 1 7 7 s p eci m en s u n d erwen to r m ay h av e u n d erg o n e t ax i
d ermy . Wh en p res s ed o n h o w h e co u l d o p i n e th atth es e t ax i d erm i eds p eci m en s were “ p res erv edi n a n atu ral s t at e,” h e res p o n ded : “ Becau s e I rev i ewedth is wi t h An i bal Ro dri g uez wh o i s an au t h o ri ty o n t hi s an d * * * th at ’ s wh at h e t ol dm e.” Al th ou g h M r. W i en er o pi n edth at“ al l [1 7 7 ] s peci m en s * * * are i n ex cel l en t
co n di t i o n an dap p ro p ri at e fo r i n cl u s i o n i n a s ci en t i fi c s tu dy co l l ect i o n , ” h e t rack ed M r. Ro dri g u ez i n as s u m in g wh ath e s ou g h tt o p ro v e. Hi s o pi n i o n t o th i s effect
was p rem i s ed on an “ ex t rao rd i n ary as s u m p t i o n,” n am el y , th at “ al l s p eci m en s are i n
ex cel l en tco nd it i o n as rep o rt ed .” He ad m it t edth at h i s o p i n i o n was b o t h t au t o l o g i cal an dd eri vat i v e, h av i n g b een b as edo n h i s “ rev i ew o f t h e rep ortp ro du ced b y An i bal Ro dri g uez.” On cro s s-ex am i n at i o n h e ack n owl ed g edth ath e co u ldt el l fro m th e p h o t o g rap h s th atm an y s p eci m en s were act u al l y i n rat h er p o o r co n d i t i o n. Al l i n al l we fo u n d M r. W i en er’ s t es t i m o n y t o h av e n o p ro b at i ve v al u e.- 2 1 -

[* 2 1 ] Pet i ti o n er’ s t h ird ex p ert , J ackAt ch es o n , i s an i n t ern at i o n al h u n ti n g co n s u l t an twh o s e fi rm

s p eci al i zes i n p ro v i d i n g co s tes t i m at es fo r “ fai r ch as e” h u n t i n g
ex p ed i t i o n s . As h i s fi rm ’ s p ub l i ci t y b ro ch u res ex p l ai n , a “ fai r ch as e” h un t i n g ad
v en tu re i s “ a g ran d ex p eri en ce,” q u it e u n l i k e t h e h u m dru m g u i d edt o u rs p ro v i d ed b y l o cal trav el ag en ci es . He was th e o n l y o n e o f p et i ti o n er’ s ex p ert s t o p uta d o l l ar fi gu re o n the “ rep l acem en t co s t ” fo r t h e 1 7 7 s peci m en s . He o p in edth atth i s co s t
wo u l db e $ 2 ,5 54 ,3 0 0 , o r $ 1 ,1 2 8 ,4 0 0 m o re t h an th e “ rep l acem en tco s t ” v al u e t h at p et i t i o n er rep o rt edo n h i s t ax retu rn s . M r. At ch es o n arri v edat t h i s n u m b er b y es ti m at i ng th e o ut -o f-p o ck etco s t s a h u n t er wo u l d i n cu r (i n cl ud i n g t rav el , fo o d , l o dg i n g , p erm i t fees , an dl o cal g u i d es ) t o g o o n 1 7 7 s ep arat e s afari s o rg an i zedas l u x u ri o u s “ fai r ch as e” h u n ti n g ex p ed i
t i on s . He as s u m edth ateach o f t h e 1 7 7 s p eci m en s wo u ldb e h arv es t edo n a
s ep arat e t ri p , wo u l db e crat edi n d i v i du al l y , an d wo u ldb e s h i pp edb ackb y i t s el f. To th es e es t i m at edco s ts h e ad d edth e ex p en s e o f d o i n g th e n eces saryt ax i d ermy
an d m o u n t i n g wo rk
. M r. At ch es o n m ad e n o al l o wan ce fo r t h e h u n t er’ s p ers o n al en jo ym en to f th es e “ g ran dad v en tu res . ” To acco u n tfo r t h e p o s s i b i l it y th ath i s es t i m at es were at

“ th e h i g h en d ,” h e ap p l i eda fl at1 5 % redu ct i o n , b uth e o ffered n o rat io n al e fo r t h at p ercen t ag e. He g ru d g i n gl y co n ced edth at m

u l t i p l e an i m al s co u ldb e h un t edi n o n e- 2 2 -

[* 2 2 ] tri p , th at m

u l t i pl e s p eci m en s co u l db e h arv es t edfro m th e s am e an im al , an d th atm u l t ip l e s p eci m en s co u l d b e s h ip p edi n a s in g l e crat e. (Pet i t io n er ad m i t t ed th ath e h ado ft enh u n t edm u l t i p l e an i m al s o n a s i n g l e t ri p an dh arv es tedm ul t i p l e
s p eci m en s fro m

th e s am e an i m al .) Bu tM r. At ch es o n n ev ert h el es s i n s i s t edth atth e
co s to f 1 7 7 s ep arat e s afari s an d1 7 7 s ep arat e s hi p m en ts was th e ap p ro pri at e way t o d et erm i n e t h e FM V o f t h e 1 7 7 s p eci m en s . III. An al y s i s Th i s i s n o tth e fi rs t t i m e we h av e h adt o ad ju di cat e a v al uat i on d i sp u t e o v er a ch ari t ab l e co n tri b ut i o n o f h u n t i n g s p eci m en s. 7 As wi t h an y o t h er v al uat i on ex erci s e, i f an act i ve m ark etex i s t s , we g en eral l y rel y o n co m p arab l e s al es . InRo b s o n
v . Co m m i s s i o n er, T.C. M em o . 1 9 9 7 -1 7 6 , 7 3 T.C.M . (CCH) 2 5 7 4, 2 5 7 6 , aff’ d , 1 72 F.3 d8 7 6 (9 t h Ci r. 1 9 9 9), wh i ch i n v o l v eda co n t ri b u ti on o f s h o u ld er m o u n ts , cap es , an dh orn s, we fo u n d t h at“ an act i v e m ark etex is ts th ro u gh o u tth e Un i t ed St at es fo r s ub st an t i al l y

co m p arab l e i t em s . ” In Ep p i ng v . Co m m i s s i o n er, T.C.

7 Th ere m ay

b e fewer s u ch d i s p u t es i n t h e fu tu re. In th e Pen s i o n Pro t ect i o n Acto f 2 0 0 6, Pub
. L. No . 1 0 9 -2 8 0 , s ec. 1 2 1 4 , 1 2 0 St at . at1 07 7 , Co n g res s ad d ed Co d e p ro v i s i o ns l i m i t i n g th e d edu ct i o n fo r t h e ch ari t ab l e co n t ri b u ti o n o f an y “p rep ared , s tu ffed , o r m o u n t ed ” an i m al s p eci m en t o th e l o wer o f FM V o r “ t h e co s t o f t h e p rep ari n g , s tu ffi ng , o r m o u nt i ng .” See s ec. 1 7 0 (e)(1 )(B)(i v ), (f)(1 5 ). Th e n ew p ro v i s i o n s th u s d i s al lo w an y d edu ct i o n fo r t he d i rect an di n d i rect co s t s o f h u n t i n g o r k i l l i n g t h e an i m al , i n cl u d i n g trav el an dtran s p o rt at io n co s t s . Becau s e th o s e p ro v i s i o n s ap p ly

t o co n t ri b ut i o n s m ad e aft er J u ly 2 5 , 2 0 0 6 , th ey

are i n ap p l i cab l e t o p et i ti on er’ s g i ft , wh i ch was m ad e i n Ap ri l 2 0 0 6
.- 2 3 -

[* 2 3 ] M em o . 1 9 9 2 -2 7 9, 6 3 T.C.M . (CCH) 3 01 2 , 3 0 1 3 , 3 0 1 4 , wh i ch i n v o l v ed“ an
as s o rt m en to f an i m al m o u n t s , h o rn s , ru g s, an d an t l ers ,” we ag ai n fo u n dthat“ an act i ve m ark etex i st s wi t h s ub s tan t i al co m p arab l e s al e i t em s .” Rep l acem en tco stm ay

b e a rel ev an tm eas u re o f v al u e “ wh ere t h e p ro p ert y i s
u n i qu e, t h e m ark eti s l im i ted , an dth ere i s n o ev i d en ce o f co m p arab le s al es .” Ro b
s o n , 7 3 T.C.M . (CCH) at 2 5 7 6 (ci t i n g Es tat e o f Pal m er v . Co m m i s si on er, 8 3 9 F.2 d 4 2 0 , 4 2 4 (8 t h Ci r. 1 9 8 8 ), rev ’ g 8 6 T.C. 6 6 (1 98 6 )). Fo r u s t o es ch ew co m p arab l e
s al es i n fav o r o f rep l acem en tco s t , th e t ax p ay er m u s tes t ab l i s h , n o to nl y

the ab
s en ce o f an act i ve m ark etfo r co m p arab l e i t em s , b utal s o a “ p ro b at i v e co rrel at i o n ” b et ween rep l acem en t co s tan d FM V. Rai ni er Co s . v . Co m m i s s i o n er, T.C. M em o. 1 9 7 7 -3 5 1 , 3 6 T.C.M . (CCH) 1 4 0 4 , 1 4 0 5 -1 4 0 6 (ci ti n g Rev . Pro c. 6 6 -4 9 , 1 96 6 -2 C.B. 1 2 5 7); s ee al s o Cro ck er v . Co m m i s s io n er, T.C. M em o . 1 9 9 8 -2 0 4 , 7 5 T.C.M
. (CCH) 2 4 1 4 , 2 4 4 2
. M r. Ket n er’ s wri t t en an do ral t es t i m o n y p ers uad edu s th atth e 1 7 7 d on at ed i t em s were n ei t her wo rl d-cl as s t ro p hi es n o r m u s eu m -qual i ty

res earch s p eci m en s , b u twere m o st l y “ remn an ts , l eft o v ers , an ds crap s ” o f t h e co l l ect i o n d i s p l ay edi n p et i t i o n er’ s t ro p h y

ro o m . Pet i t i o n er’ s o wn t es t i m o n y i n di cat edth ath e wi s h edt o

“ d o wn s i ze” h i s co l l ect i o n b y d eacces s i o n i n g u n wan t ed i t em s . Al t h o ug h h i s ex p ert s as s ert edth atal l s peci m en s were o f “ ex cel l en t ” qu al it y , th ey o ffered n o fac-- 2 4 -

[* 2 4 ] tu al b ack i n g fo r th atas s ert i o n an dad m i t tedth atDr. Fu l l in g t o n ’ s p h o t o g rap h s o ft en i n d icat ed t h e o p p o s i t e. An dal t h ou g h p et it i o n er h adp art i ci p at edi n
s ev eral reco rdh u nt s, n o ta s i n g l e s p eci m en th ath e s el ect edfo r d o n at io n t o DEF
was o f reco rd -b o o kqu al i t y . In s h o rt , th e 1 7 7 s p eci m en s were cl earl y co m m o d it i es , n otco l l ect i b l es . Fo r
co m m o d it i es s u ch as t h es e, t h e d et erm in at io n o f FM V wi l l g en eral l y b e b as edo n
m ark etp ri ces fo r s i m i l ar i t em s. M r. Ket n er cred i b l y t es t i fi edthatan act iv e m ark et
ex i s t edi n wh i ch t ax i d erm i edp ro du ct s l i k e p et i t i o n er’ s h av e l on g trad edan dth at th e i n t ern eth as v as t l y

ex p an d edth atm ark etp l ace. In d eed , h e fo u nd5 0 4 co m p arab l e s al es tran s act i on s o n trad i t i o n al an di n tern etau ct i o n s i t es . Pet i ti o ner o ffered n o ev i d en ce o r ex pert t es t i m o n y t o co n t rad i ctM r. Ket n er’ s t es ti m o n y th atan act i ve m ark etfo r s u ch i tem s ex i s t edatth e t i m e o f t he g i ft
. Rel y i n g o n ev i d en ce o f co m p arab l e s al es , M r. Ket n er o p i n edth atth e FM V
o f t h e 1 7 7 s p eci m en s was b et ween $ 4 1 ,1 4 0 (as s u m i ng th atal l s p eci m en s were o f h i g h qual i t y ) an d $ 3 4 ,2 4 0 (as s u m i n g t h atth ey were n o t ). Pet i t i o n er d i dn o ts eri
o u s l y ch al l en g e M r. Ket ner’ s d at a an di nt ro duced n o ev i d en ce o f m ark etp ri ces fo r
co m p arab l e i tem s . Pet it i o n er t h u s fai l edt o carryh i s b u rd en o f p ro v in g th atth e FM V o f t h e 1 7 7 s p eci m en s ex ceed ed t h e $ 16 3 , 0 4 5 v al u e t h atth e IRS al l o w edi n th e n o ti ce o f d efi ci en cy . See Ro b s o n , 7 3 T.C.M
. (CCH) at 2 5 76 -2 5 7 7
.- 2 5 -

[* 2 5 ] Ontwo p ri or o ccas i o n s , we h av e g i v enco n si d erat io n t o rep l acem en tco s tas
o n e el em en ti n d et erm i n i n g th e FM V o f d on at edan i m al s peci m en s . See En g el v . Co m m i s s i o n er, T.C. M em o . 1 9 9 3 -3 6 2 , 6 6 T.C.M . (CCH) 3 7 8 ; Es tat e o f M i l l er v . Co m m i s s i o n er, T.C. M em o . 1 9 9 1 -5 1 5 , 6 2 T.C.M . (CCH) 9 9 7 , aff’ d wi t h o u t p ub l i s h edo p i n i o n, 9 8 3 F.2 d2 3 2 (5 t h Ci r. 1 9 93 ). Co m p are Ro b so n , 7 3 T.C.M
. (CCH) at 2 5 7 6 (reject i ng u se o f rep l acem en tco s t ). In En gel we co n cl u d edth at ,

“ wh en o n l y

a t h i n m ark etfo r th e d o n at edi t em s ex i s ts * * * , i ti s ap p ro pri at e t o
co n si d er rep lacem en tco st s as o n e fact o r i n t h e o v eral l v al u at i o n m et h o d .” 6 6 T.C.M . (CCH) at 3 85 (em p h as i s i n o ri g i n al ) (ci t i n g Es t at e o f M i l l er). Bo t h cas es tu rn edo n o u r ev al u at i o n o f t h e ex p ertt es t i m on y . In Es t at e o f M i l l er, m o s to f t h e d o n at edtro p h ies ap p ear t o h av e b een “ fu l l
b o dy tro p h i es ” an d s om e were ran kedi n th e SCI reco rdb o o k. 6 2 T.C.M
. (CCH) at9 9 9 , 1 0 0 5 . Th e Co m

m i s s i o n er’ s ex p ertad m i t t edth at h e h adn eg lect edt o ad ju s t h i s v al u at i o n s t o refl ect t h e s p eci m en s ’ reco rd -b o o ks t atus . See i d . at1 0 0 5 . In En g el , th e d o n at edi tem s ap p ear t o h av e b een “ sh o ul d er m o u n t s ” o r fu l l s k i n s . See 6 6 T.C.M . (CCH) at 3 8 0 . Th e t ax p ay er-d o n o r h ad “ l is t eda n u m b er o f an i m al s i n th e * * * [SCI] reco rdb o o k s” an dth e d o n at ed“ s p eci m en s were i n ex cel l en t
co n di t i o n an di n d i cat eda d eg ree o f care an dp ri d e ab o v e av erag e.” Id . at3 7 9 , 3 8 3 . Here, b y

co n t ras t, th e 1 7 7 s p eci m en s i ncl u d edn o fu l l -b o dy m o un t s an do n ly- 2 6 -

[* 2 6 ] th ree s h o u l d er m o u n t s ; n o n e o f t h e d o n at edi t em s h adreco rd -b o oks t atu s ;
an d th e co n d it i o n o f t h e s p eci m en s (g i v en the i m po s si b i l i t y o f p h y s i cal i n s p ect i o n )
was ques t i o n ab l e atb es t. In En g el , we rel i edt o s o m e d eg ree o n rep lacem en t co stb ecau s e t h e ev i
d en ce s u g g es t edth at , i n 1 9 85 , th e “ m ark eti n wo rl d -cl as s tro p h y m o u n ts ” was

“ rat h er t h i n ” an dn o t“ es t ab l i s h ed .” 6 6 T.C.M . (CCH) at 3 8 4. Th us , th e co m p arab l e p ri ces up o n wh i ch th e Co m m is s i o n er rel i edd i dn o ti n d i cat e th e p ri ces at wh i ch th e t ax p ay er’ s “ wo rl d -cl as s an i m al tro p hi es wo u l d s el l .” Id . at3 8 5
. Here, b y co n tras t , p et i ti on er d o n at edn o wo rl d -cl as s an i m al tro ph i es b utm o s t l y “ rem n an ts , l eft o v ers , an ds crap s ” o f t h e v as t l y s up eri o r co l l ect i o n t h ath e ret ai n ed . Th e 1 7 7 s p eci m en s i n v o l v edh ere res em b l e t ho s e ati s s ue i n Ep p in g --“ an as s ort m en to f
an i m al m o u n t s , h orn s , ru g s , an dan t l ers ”--fo r wh i ch we fo u n dth at“ an act i v e
m ark etex i s t s .” 6 3 T.C.M . (CCH) at 3 0 1 4 . M r. Ket n er co n vi n ci ng l y t es t i fi ed ab o utth e ex i st en ce o f s u ch an act iv e m ark et , an dp et i t i o n er’ s ex p ert s o ffered n o p ers u as i v e t es ti m o n y

t o th e co nt rary . In n ei th er En g el n o r Es t at e o f M i l l er, m o reo v er, d i dwe fi n dth e FM Vo f t h e h u n t i n g s p eci m en s t o b e t hei r fu l l rep lacem en tco s t, as p et i t i o n er u rg es h ere. Qu i te th e co n trary : InEn g el we co n cl u d edth atu se o f cu rren t“ rep l acem en tco st s fo r d o n at i o n s o f o l dg am e m ou nt s can n o tb e ju s t i fi ed ,” p o i nt i ng o u tth at“ if a m u s eu m- 2 7 -

[* 2 7 ] fi n an cedi ts o wnh u nt i n g tri p * * * , i two ul d h av e n ewl y k i l l edan i m al s t o
m o un tan dco u l dm o u n tth em fo r i t s p u rp o s es (n atu ral h is t ory d i sp l ay s ) rat h er t h an
as tro p h y m o u nt s . ” 6 6 T.C.M . (CCH) at 3 8 5 ; acco rd , Es t at e o f M i l l er, 6 2 T.C.M
. (CCH) at 1 0 0 6 (n o t i n g th at“ a m u s eu m wo u l dn ot p ay

* * * fu l l rep l acem en tv al u e fo r a t ro p h y , b ecau s e fo r t h atam o u nto f m on ey , a m u s eu m wo u l d g o i n t o th e fi el d
an d rep l ace t h e tro p h y i t s el f”). In En g el , we requ iredo n l y th atth e Co m

m i s si o n er’ s ex p ert ’ s co m parab l e
s al es fi g u res “be ad

j u s t ed up wardt o acco un tfo r t h e b et t er q u al i t y ” o f t h e t ax p ay er’ s s p eci m en s. 6 6 T.C.M . (CCH) at 3 8 5 . Pet i t i o n er h as m ad e n o cas e fo r
s u ch an“ up wardad

ju s t m en t ” h ere. An d ev en i f h e h ad m ad e s u ch a cas e, we fi n d M r. At ch es o n ’ s fo rm

u l a fo r d et erm i n i n g “ rep l acem en tco s t ” u n accep t ab l e b ecau s e i t to o kn o acco u n t o f t h e p ers o n al p l eas u re p et i t i o ner d eri v edfro m h i s s afari s . See i b i d . (“ [T] h e recreat i on al b i g g am e h u n t er recei v es a qu i dp ro qu o , th e p leas u re o f p u rs u i n g h i s h o bb y , s o al l th e co s t s o f t he h u n t i n g tri p can n o tb e at t ri b u tedt o th e
an i m al th ati s k i ll ed .”). 8

8 Ev en i f we were t o co n s i d er rep l acem en tco st s an dm ak e s o m e up wardad
ju s t m en tt o th e v al u es t h atM r. Ket n er d et erm i n ed , wh i ch ran g edfro m $ 3 4 , 2 4 0 t o $ 4 1 ,1 4 0 , we wo u l dn o tg etan ywh ere cl o s e t o th e $ 1 6 3 , 0 45 v al u at i o n thatth e IRS al l o wed pet i ti o n er i n t h e n o t ice o f d efi ci en cy .- 2 8 -

[* 2 8 ] In d eed , th i s cas e i s d i s t i n g u i s h ab l e fro m En g el an d Es t at e o f M il l er i n a
m o re fu nd am en t al res p ect . Pet i t i o n er i s n o tco n t en di n g , an dh e co u l dn o tp l au s i
b l y co n t en d , th atan y o f t h e 1 7 7 s p eci m en s was a wo rl d-cl as s h u nt i n g tro p h y th at rarel y ap p ears i n th e o p en m ark et . Rat h er, h i s th eo ry i s th atrep l acem en t co s tm u s t b e u s edb ecau se t he i t em s h e d on at ed t o DEF were p ri s t i n e s peci m en s o f ex cel l en t p ro v en an ce t h atwo u l db e i d eal fo r m u s eu m s tu dy an d res earch
. Bu tp et i ti o n er d idn o t i n t ro du ce a s h redo f ev i d en ce t o p ro v e t h atth e s p eci
m en s fi tth i s b i l l. Th ey

h adb een d i s p ers ed t o u n kn o wnl o cat i o ns ; they were u n av ai l ab l e fo r p h y s i cal i n s p ect i on ; an dth e p h o t o grap h s o f th em were m ed i o cre. In fo rm at i o n ab o u tth ei r p ro v en an ce, es p eci al l y the s o rtth atwo u l d i n t eres ta
m u seu m , was ex t rem el y

s p ars e. In fact , th ey

ap p ear t o h av e b een m i ne-ru n t ax i d erm i edi t em s wh o s e ch em i cal treat m en two u l d m ak e t h em u n at t ract i v e t o a p ub l i c i n s t i tu t i o n . Pet i t io n er d i dk i l l th e an i m al s h i m s el f, an dth e s peci m en s th u s h ad n o i nt erv en in g o wn ers . Bu tth i s wi l l b e t ru e wh en ev er a h u n t er d eacces s i o n s
u n wan t eds crap s fro m

h i s co l l ect i o n , an dp et i ti o ner i nt ro duced n o ev i d en ce
s u g g es t i n g th atth i s as p ecto f “ pro v en an ce” h o ld s i m p o rt an ce fo r m

u s eu m s . Ins u m , p et i t i o ner h as fai l edt o carryh i s b u rd en o f p ro v i n g th atth e FM V o f th e 1 7 7 s p eci m en s ex ceed edth e $ 1 6 3 ,0 4 5 v al u e t h at t h e IRS al l o wedi n th e n o t i ce
o f d efi ci en cy . W e wi l l acco rd i n g ly s u s t ai n res po n d en t’ s d eci s i o n t o d i s al l o w th e- 2 9 -

[* 2 9 ] b u l ko f t he ch ari tab l e co n t ri b u t io n d educt i o n p et i ti o n er cl ai m edfo r 2 0 0 7 an d th e en t i ret y

o f t h e ch ari t ab l e co n t ri b u t i o n d educt i o n h e cl ai m edfo r 2 00 8
. To i m p lem en tth e fo reg o i n g , Deci s i o n wi ll b e en t eredu n d er Ru l e 1 5 5
.