SECTION 2. BACKGROUND

.01 Income Tax Charitable De- duction .

(1) Section 170(a) of the Internal Revenue Code allows as a deduction any charitable contribution (as defined in § 170(c)) payment of which is made during the taxable year.

(2) Section 1.170A–1(c)(1) of the Income Tax Regulations provides that if a charitable contribution is made in property other than money, the amount of the contribution is generally the fair market value of the property at the time of the contribution.

(3) Section 1.170A–1(c)(2) provides that the fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts.

(4) Section 1.170A–13 sets forth the recordkeeping and return requirements for deductions for charitable contributions. For a deduction for a charitable contribution of property in excess of $5,000, § 1.170A–13(c) requires a qualified appraisal and an appraisal summary.

(5) Rev. Proc. 66–49, 1966–2 C.B. 1257, provides guidelines for review of appraisals of contributed property for purposes of § 170. Section 4.01 of Rev. Proc. 66–49 states that the Service will not approve valuations or appraisals prior to the actual filing of the tax return to which the appraisal pertains, and will not issue advance rulings approving or disapproving appraisals.

.02 Estate Tax . (1) Section 2031 provides that the value of the gross estate of a decedent is determined by including the value at the time of death of all property wherever situated.

(2) Section 20.2031–1(b) of the Estate Tax Regulations provides that the value of property includible in a decedent’s gross estate is its fair market value at the time of the decedent’s death.

(3) Section 2032(a) provides that the executor may elect to determine the value of all the property included in the gross estate as of 6 months after the decedent’s death. However, property distributed, sold, exchanged, or otherwise disposed of within 6 months after death must be valued as of the date of distribution, sale, exchange, or other disposition.

(4) Section 20.2031–6(a) provides that the fair market value of a decedent’s household and personal effects is the price that a willing buyer would pay to a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of the relevant facts.

(5) Section 20.2031–6(b) provides that if there are included among the household and personal effects articles having marked artistic or intrinsic value of a total in excess of $3,000, the appraisal of an expert or experts, under oath, must be filed with the estate tax return.

(6) Section 20.2031–6(d) provides that if, pursuant to § 20.2031–6 (a) and (b), expert appraisers are employed, care must be taken to see that they are reputable and of recognized competency to appraise the particular class of

property involved. In listing paintings having artistic value, the size, subject, and artist’s name must be stated.

.03 Gift Tax . (1) Section 2512(a) provides that if a gift is made in property, the value thereof at the date of the gift is the amount of the gift.

(2) Section 25.2512–1 of the Gift Tax Regulations provides that the value of property is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of the relevant facts.

.04 Legislation Authorizing User Fees . Section 10511 of the Revenue Act of 1987, 1987–3 C.B. 1, 166, as amended by § 11319 of the Omnibus Budget Reconciliation Act of 1990, 1991–2 C.B. 481, 511, and by § 743 of the Uruguay Round Agreements Act, 1995–11 I.R.B. 5, 14, requires the Secretary of the Treasury or delegate to establish a program requiring the payment of user fees for requests to the Service for letter rulings, opinion letters, determination letters, and similar requests. The fees apply to requests made on or after February 1, 1988, and before October 1, 2000. The fees charged under the program (1) vary according to categories or subcategories established by the Secretary; (2) are determined after taking into account the average time for, and difficulty of, complying with requests in each category and subcategory; and (3) are payable in advance.