The appraisal, I mean, to your Form 8832. And make sure it comports with Section 170 and the regulations thereunder. But if it doesn’t, and you reasonably relied on experts who said that it did, you’re OK.

That’s Judge Laro’s message for John Crimi, et al., 2013 T. C. Memo. 51, filed 2/14/13, a Valentine’s Day gift to the taxpayers.

This was another charitable land gift case, with dueling experts testifying concurrently about development rights, environmental legislation and appraisal methodology, featuring a “statistical model using polynomial regression to correlate a relationship between the number of lots into which an undeveloped parcel of land may be subdivided and the sale price per lot. The regression analysis shows a relationship of a diminishing rate of return.” 2013 T. C. Memo. 51, at p. 74. So does my comprehension of this stuff show a severely diminished rate of return.

A word about expert testimony is in season here. “An expert qualified to testify in a judicial proceeding owes a duty to the Court that transcends the duty to his or her client insofar as the expert must present his or her opinion, as well as the facts, data, and analysis on which he or she relied, neutrally and candidly. Experts who breach their duty to the Court in order to advance their client’s litigating position compromise their usefulness.” 2013 T. C. Memo. 51, at p. 41. (Citations omitted). So, kids, play nice.

Judge Laro laments that, notwithstanding that the experts testified concurrently (“…we cannot overstate the importance of concurrent witness testimony in these cases.” 2013 T. C. Memo. 51, at p. 34), here, alas, “(O)n brief, as with cross-examination, each party aims more to discredit the opposing party’s appraiser than to prove the reliability and accuracy of their own expert appraiser.” 2013 T. C. Memo. 51, at p. 57.

Wherefore, “we decline to accept either expert’s conclusion as to the subject property’s fair market value because, as the concurrent testimony highlighted, each suffers from critical errors in analysis and application. Accordingly, we shall reconstruct the subject property’s fair market value aided by common sense, the experts’ reports, and the benefit of their concurrent testimony.” 2013 T. C. Memo. 51, at pp. 59-60.

So we’re back to the usual mix-and-match.

But even if the appraisal you attach to your Form 8832 is flawed, all is not lost. “We need not decide whether the 2000 appraisal substantially complied with the requirements for a qualified appraisal because we agree with petitioners that their noncompliance would be in any event excused for reasonable cause because they reasonably and in good faith relied on Mr. X’s advice that the 2000 appraisal met all legal requirements to claim the deduction.” 2013 T. C. Memo. 51, at p. 98. (Name omitted).

Judge Laro analogizes to the penalty situations (how nice to see Neonatology Associates cited yet again; if Neonatology Associates got a royalty every time that case was cited, they’d be rolling in it). Crimi relied upon Mr. X, who was an accountant and an attorney, and was with the firm that for twenty years had done all Crimi’s taxes without a hitch. Mr. X blessed the outdated appraisal, and Crimi had no reason to doubt his trusted adviser (although now Crimi might be a wee bit more cautious).

So Crimi gets their deduction (or at least some of it).