To obtain a charitable deduction for many contributions of property, the taxpayer is required to obtain a “qualified appraisal” and submit that appraisal with the income tax return. Treas. Regs. §1.170A-13(c)(ii) contains a laundry list of items that 
If the IRS can show that no qualified appraisal was submitted, then it will seek to disallow the charitable deduction in full. If, instead, the IRS contests the appraised value, then the parties will negotiate, or fight out in court, over what is the appropriate value for deduction purposes. Obviously, for a taxpayer, it is better to be in the latter scenario (some deduction) than the former (no deduction).
In a recent case, the Tax Court had ruled that the above descriptive requirement was not met when an appraisal for a donated conservation easement described the appraisal method as the before-and-after method, using a fixed percentage reduction in the after-contribution value to determine the before value, and thus the value of the contribution. The Second Circuit Court of Appeals has now reversed the Tax Court. In its opinion, the Court noted that the above qualified appraisal requirement did not require that the valuation method be one that the IRS accepted – the requirement only goes to whether the method was properly identified. More particularly, the Court said:
For the purpose of gauging compliance with the reporting requirement, it is irrelevant that the IRS believes the method employed was sloppy or inaccurate, or haphazardly applied—it remains a method, and Drazner described it. The regulation requires only that the appraiser identify the valuation method “used”; it does not require that the method adopted be reliable.
Scheidelman v. Commissioner of Internal Revenue, 2nd Circuit Court of Appeals (6/15/12)
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