I assure you I don’t purposely set out looking for stories that make the IRS look ridiculous.  And I don’t purposely look for evidence that the IRS is a blood-thirsty machine set on crushing any hope of tax relief.  These kinds of stories just happen to be much more prevalent than ones that make the IRS look competent and organized.

In 1959 a prominent artist named Robert Rauschenberg created a masterpiece called “Canyon.”  While Rauschenberg was known for incorporating found objects and junk into his art, in “Canyon” he upgraded to an actual stuffed bald eagle that once belonged to Theodore Roosevelt.  Through the years, Rauschenberg’s art attracted the attention of collectors, including New York art dealer, Ileana Sonnabend.  I don’t suppose he ever considered that his imagination would attract the attention of the IRS.

When Sonnabend died, her heirs inherited some very high-end art, including “Canyon,” and were hit with a fat estate tax bill.  Not fat enough for the IRS.  The new owners of “Canyon” valued the piece at $0 based on appraisals from world renowned auction houses.  The piece cannot be sold because of the bald eagle — it would violate federal wildlife protection laws.  But the IRS has billed the heirs for another $29 million based on its own $65 million appraisal of the piece.  The IRS Art Advisory Panel acknowledges that “Canyon” cannot legally be sold, but they “just cringed at the idea of saying that this had zero value. It just didn’t make any sense.”