Question:
What is the monetary value of something that can’t be sold?
Answer:
Nothing.
That’s an easy one.
So why is the IRS claiming that the heirs of the New York art dealer Ileana Sonnabend owe $29.2 million in taxes on an art work that U.S. prevents from ever being converted into cash?
That’s a harder question to answer, but it appears that it is a blatant example of the government trying to take money from rich people whether they have any right to it or not. We will see more of this, too, in coming years, as the nation desperately attempts to pare back the deadly debt created by the tag-team irresponsibility of the Bush and Obama administrations. The non-rich will shrug their shoulders and mutter, “Well, those people can afford it,” as the wealthy are fleeced, and they will be fools. Once the we grant the government the license to confiscate property from the wealthy using rationalizations and deceit, there will be little to stop it from moving down the income levels using the same dishonest arguments, cheered on by those whose income is safely (or so they think) minor enough to escape the onslaught.
The art work is “Canyon,” a classic 20th-century whatsis created by artist Robert Rauschenberg. “Canyon” combines elements of painting, sculpture and artifacts, one of which is a stuffed bald eagle. Mrs. Sonnabend’s children inherited it when she died in 2007, as part of an art collection valued at about $1 billion dollars.
Since the work includes the eagle, a bird under federal protection, the owners would be committing a felony if they ever sold it. Reasonably, their accountants valued the work at zero. The Internal Revenue Service, however, has appraised “Canyon” at $65 million, and is demanding that the owners pay $29.2 million in taxes on it. Nina Sundell and Antonio Homem, the beneficiaries of the art inheritance, have already paid $471 million in federal and state estate taxes related to the collection, which included works by many modern masters, like Jasper Johns, Andy Warhol, and others. Now they have to go to court to fight a cash assessment on an art work that can never be converted into cash.
Hmmm. What other “valuable” but unsaleable items might the IRS come after? Kidneys? They are valuable, but it’s illegal to sell them: should the IRS tax kidneys? Babies can fetch a lot of money on the black market; so can teenage girls. We’ll cover that 17 trillion dollar debt in no time!
The fact is that attaching a cash value to something that can never be sold is unfair, illogical, and disingenuous. “Canyon” has no more value to Mrs. Sonnabend’s children at this point than my late father in law’s rusting, undrivable 1982 Buick Century that sat gathering tickets in front of my house for months…less, really. I could sell that piece of junk for scrap. “Canyon” will probably cost money, just to keep it in temperature controlled storage. I can guess what would happen to the damn thing in my house; I can just hear it now: “Oh, no…there’s no way that thing is going up on our walls!”
The IRS’s attempt to bully Nina Sundell and Antonio Homem into giving up over $29 million for something that has no real monetary value is an unconscionable abuse of power. But hey, why should we care? They’re rich!
And that response is just what the government is counting on.
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Facts: New York Times
Graphic: Future Modern
Ethics Alarms attempts to give proper attribution and credit to all sources of facts, analysis and other assistance that go into its blog posts. If you are aware of one I missed, or believe your own work was used in any way without proper attribution, please contact me, Jack Marshall, at jamproethics@verizon.net.
Ethics Alarms 
In your third-to-last paragraph, at the end, did you mean to refer to the U.S. federal debt of $17 trillion (not $million)?
Trillion. Right. Fixed it. Thanks.
They need to immediately donate it to the Treasury Department.
Then they can take a huge tax deduction instead, and Tim Geitner can figure out what to do with it.
–Dwayne
One wonders what would have happened if Sonnabend, before her death, had donated the piece to a museum and taken a $65 million tax write-off. Would the IRS then have decided that the piece has no re-sale value and is therefore worthless?
It is troubling that the answer is… “I don’t know.”
And you are surprised that a criminal syndicate’s “protection” and enforcement arm does something unethical?
No.
It’s hilarious, but expected, that a man who purports to care deeply about ethics is antagonistic and self righteous. Characterizing the IRS as “stealing” is an example. Maybe the IRS is wrong, maybe some one there has an agenda, maybe not. But he implies that he knows the motivation of the people involved in this case. If so, why doesnt he tell us how he knows?
He just KNOWS it, that’s all. Why? Because he KNOWS.
He doesn’t know poop about it. It’s very likely he took five times as much time to write about it, as he did to find out what’s the pros and cons about it. At lease, he doesn’t offer any facts about how he arrived at this knowledge. And he knows MORE cases like this will come. Yeah, he is that smart.
And this might come as a shock — but no matter what the IRS proposes, a judge will hear the case — and then another, and another. And another. The way this demagogue writes, its as if the IRS is a group of people out to steal money. And they steal money, he implies, because Obama and Bush ran up debt.
This guy is so smug and arrogant, without any apparent hesitation, announces the IRS is stealing. Can you imagine if someone accused him of stealing? He would be crying in his big boy pants.
Sam Donaldson said that most of human conversation can be reduced to this “Why you should be more like me” or in other words “why I am superior to you”. This guy seems to be so motivated.
Actual arguments are preferable to arch snottiness. Taking money that one has no right to take is, in fact, stealing. The fact that a court might stop it does not justify an abuse of power—fighting power takes time and money.
My name is available, right here. I accept screen names, but I also expect those who have criticism and commentary to let me know who they are, which you have not done. Yes, I know that those who abuse their power have reasons. In this case, the reason is to take as much money as possible from someone regardless of whether it is fair or logical. The reason is that the government needs money. This is too much of a leap for you? Too bad. The rationalization that we shouldn’t question unfair or wrongful acts because “we don’t know” what’s “in their hearts” is a classic argument for ethics inertia. I have considerable experience with bureaucratic bullies and government entities. When they do something like this, the usual reason is “because we can.” Occam’s Razor applies. The IRS wants money because they think the law will support what they are doing, and their job is to get as much money as the law will permit. Fairness has nothing to do with it, not when the coffers are empty. It you think the IRS is motivated by kindness for kittens, the burden is on you, not me.
This is my site, and when one comes here for the first time, it is customary to apply a modicum of manners, which is to say, have the courtesy to call me by name, write directly, and eschew comments about my “big boy pants.” If you can’t do that, you’re a boor, and not welcome here.