Abstract Several commentators have examined the valuation process for property and closely held stock in estate, gift, and income tax cases in the federal courts. Examination of court determined values led many to conclude that the courts do not actually value property or closely held stock but rather serve as compromisers between the two opposing parties in litigation. The implications for tax counsel and public policy are extremely significant if this charge is supported by fact. The major purpose of this study is to demonstrate statistically that the Tax Court does not act in a manner consistent with a "compromiser model" in federal income tax valuations of property for charitable contribution purposes. A simple regression model is used to test the relationship between the Tax Court determined values and a compromise value--the arithmetic mean of taxpayer and IRS value estimates. In addition, chi-square analysis indicates that the Tax Court did not value one type of property more strictly or generously than other types.
Enqiebrechs et al. (Sun,) studied this question.