Scheidelman v. Commissioner of Internal Revenue, 682 F.3d 189

Taxpayer Scheidelman donated a facade conservation easement to the National Architectural Trust and had the easement appraised by Michael Drazner, who used a before-and-after method valuing the easement at $115,000.
The Trust required a 10% cash contribution from donors toward operating costs; Scheidelman paid $9,275.
The IRS audited and disallowed the charitable deduction for the easement, and the Tax Court held the appraisal insufficient as a qualified appraisal under Treas. Reg. § 1.170A-13(c)(3).
The Tax Court also found Scheidelman’s $9,275 cash contribution not deductible due to a quid pro quo consideration, and remanded for resolution of related issues.
On appeal, the Second Circuit vacated the Tax Court’s decision, held that the Drazner appraisal satisfied the minimal qualification requirements, and remanded for further proceedings; it also held the cash contribution deductible despite the quasi quid pro quo concern, and noted it would address remaining issues on remand.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the appraisal met the qualified appraisal requirements	Scheidelman satisfied J & K by detailing method and basis	Tax Court found the appraisal failed to state method and basis	Appraisal satisfied the method and basis requirements
Whether the cash contribution was deductible despite potential quid pro quo	Contribution was a charitable gift with no consideration received	Transaction resembled quid pro quo	Cash donation deductible as an unrequited contribution
Whether Form 8283 deficiencies affect deduction validity	Information was provided in two forms, fulfilling requirements	Form 8283 deficiencies implied noncompliance	Two forms together satisfied reporting requirements on appeal

Hernandez v. Comm’r, 490 U.S. 680 (Supreme Court 1989) (structural quid pro quo analysis; charitable deduction requires no value in exchange for goods/services)
Graham v. Comm’r, 822 F.2d 844 (9th Cir. 1987) (structural approach to quid pro quo; donation in exchange for benefits not deductible)
Hewitt v. Comm’r, 109 T.C. 258 (Tax Court 1997) (treatment of qualified appraisal and overvaluation concerns)
Simmons v. Commissioner, 646 F.3d 6 (D.C. Cir. 2011) (upheld before-and-after valuation as a qualified appraisal for facade easements)
Kaufman v. Commissioner, 136 T.C. 294 (Tax Court 2011) (upheld deductibility of mandatory cash contributions tied to easement donation)
Robinson Knife Mfg. Co. v. Comm’r, 600 F.3d 121 (2d Cir. 2010) (statutory review standard for Tax Court decisions; de novo on questions of law)