ACRL News Issue (B) of College & Research Libraries O ctober 1988 / 589 thought-provoking and helped the participants to clarify their thinking on some of the issues involved in the many possible future directions for library reference services. The T a x R eform Act of 1 9 8 4 and A m erican research libraries By the Ad Hoc RBMS Legislative Inform ation Committee Tim othy M urray, com piler University o f D elaw are Have the new regulations had an impact? T he Tax Reform Act of 1984 placed potential new burdens on donors and libraries in the admin­ istration of noncash gifts. Since January 1, 1985, the Internal Revenue Service requires donors to maintain detailed records concerning all gifts of property, other than cash and publicly traded secu­ rities, with a value greater than $500 for which they claim a tax deduction. In addition, the regula­ tions mandate specific institutional reporting pro­ cedures for gifts of property with values greater than $5,000. Donors must also total the value of smaller gifts of similar property to more than one institution and if the aggregate is greater than $5,000, the new reporting rules, for donor and do­ nee, w ill apply. F in ally , the regulations have placed the appraisal process under greater scru­ tin y.1 lThe text of the law can be found in D eficit R e­ duction Act o f 1984. Division A: Tax Reform Act of 1984. House of Representatives Report #98-861, 98th Congress, 2nd Session (1984), pp. 206-11. Temporary implementation rules and regulations appear in F ed eral Register 49, no.252 (December 3 1 ,1 9 8 4 ). In 1988, the temporary status of the new regulations was removed and the final implemen­ tation rules and regulations are printed in F ed eral Register 53, no.87 (May 5. 1988). The relevant forms used for the new reporting procedures are Forms 8283 and 8282. Form 8283, Following the Tax Reform Act of 1969, which eliminated tax deductions based on the donation of cultural and historical documents to non-profit in­ stitutions by their creators, research libraries re­ ported significant declines in such donations di­ rectly resulting from new regulations mandated in that a ct.2 Since the 1984 regulations also defined and mandated a series of new documentation and Section B is the appraisal summary which is com­ pleted by the donee and a qualified appraiser for gifts of property with an appraised value in excess of $5,000. Form 8282 must be completed by a do­ nee to report the disposal of any donated property, for which a form 8283 was completed, within two years of its original receipt. Under the initial regu­ lations, the donee was required to complete Form 8282 for all such disposals. The final regulations have modified this requirement and the revised in­ structions for Form 8283 include the following note: “an exception applies to items having a value of $500 or less which are part of a group of similar items contributed. For these items a donee organi­ zation does not have to file Form 8282 if the donor completed and signed the statement in Part II (Sec­ tion B) of Form 8283.” 2Norman E . Tanis and Cindy Ventuleth report the continuing effects of the 1969 legislation in “The Decline in Donations? Effects of the Tax Re­ form Act of 1 9 69 .” L ib ra ry Jou rn a l 111, no. 11 (June 15, 1986): 41-44. 590 / C &R L News reporting procedures which directly affect the op­ erations of American research libraries, the Ad Hoc Legislative Inform ation Committee of A C R L ’s Rare Books and Manuscripts Section undertook to examine the effects of the 1984 Tax Reform Act upon American libraries. In May 1987 the Committee distributed a ques­ tionnaire, “Federal Tax Regulations and Noncash Gifts to Libraries,” to seventy-five librarians repre­ senting various types of institutions, including uni­ versity and public libraries, museums, historical societies, and private research libraries. The survey focused on three fundamental topics: a) institutional response to the change in the tax law; b) donor relations and noncash gifts policy and procedures; c) appraisal policy and proce­ dures. The survey yielded thirty-five responses or 47% of the surveyed librarians. Following is a summary of the results. Institutional response Institutional response to the new legislation was split roughly in half: eighteen (51% ) of the sur­ veyed librarians reported that their institutions tried to prepare library staff for the changes and seventeen (49% ) indicated they had received no such preparation. Preparation ranked from special workshops to simple information exchanges at reg­ ularly scheduled meetings. Among librarians who received no preparation, 100% educated them­ selves through professional reading and meetings. Additionally, many of those who had received preparation indicated that professional reading and meetings were invaluable information sources about the new legislation. Donor relations The survey revealed the vast majority of donors to have little specific knowledge about the new reg­ ulations. When librarians informed them about the changes, donors, obviously, were not pleased by the added paperwork which the new regula­ tions brought; however, none of the questionnaires reported significant negative reaction from donors. Donor reaction seemed to range from mild annoy­ ance to resignation. As one respondent phrased it: “Indifferent acceptance. IRS is IRS; everybody has already made its acquaintance.” There were no re­ ports of potential donations being withdrawn as a result of the new regulations. As might be expected, the survey revealed a wide assortment of library procedures for administering gifts. But this variance resulted more from differ­ ing institutional policies for handling gifts than from specific responses to Federal tax legislation. Still, the variety of responses given to such basic topics as how records are maintained, what sorts of written policies and procedures exist, what person­ nel are responsible for accepting and administering gifts, e tc ., indicates there is very little standardiza­ tion in library gift administration procedures. Immediately following the passage of the 1984 Tax Reform Act, some librarians predicted storage and record keeping problems; however, survey re­ spondents reported no such problems resulting from the new regulations. A number of respon­ dents expressed misgivings concerning the new reg­ ulation which requires institutions to report to the Internal Revenue Service when donated property is sold, exchanged, or otherwise disposed of within two years of its receipt. Librarians were unsure what effect this might have on normal weeding practices. Most respondents assumed they now had to retain all donated property for the two-year pe­ riod; however, one librarian felt that the new regu­ lations did not apply to normal weeding proce­ dures. This would seem to be an area w here clarification as to the intent of the regulations is needed. In addition, fears that there would be vast increases in end-of-year gifts to libraries before the 1985 law took effect and, conversely, a decline in donations following the imposition of the new reg­ ulations, appear to have been unfounded. None of the respondents reported any dramatic increases or decreases in donations which they could link to the new tax regulations. Appraisals Immediately following the passage of the new legislation, a number of librarians expressed mis­ givings about the new regulations concerning ap­ praisals. W hat was formerly a loosely governed body of practices was now subject to a set of stan­ dards concerning the qualifications of appraisers and to specific appraisal practices. It appears, however, that the new appraisal regulations have not had the impact some librarians predicted. V ir­ tually all respondents indicated that their appraisal procedures bore little difference from those in place prior to the new regulations. Only two (6% ) of the surveyed librarians needed to make substan­ tive changes to their existing policies to comply with the new regulations; twenty-four (68% ) indi­ cated their appraisal procedures remained un­ changed, and nine (26% ) reported minor changes. Overall, respondents described a wide variety of practices and procedures for handling appraisals which, as was the case with gifts administration, seems to reflect institutional policy rather than re­ action to federal tax legislation. Summary Perhaps the strongest evidence that the new reg­ ulations have not had a severe impact upon library gift solicitation was the response to the final ques­ tion of the survey: “Which area [of the new regula­ tions] has been the most difficult?” Twenty-one (60% ) of the respondents didn’t even answer this question because they had not experienced any problems. The remainder who responded reported no severe problems. The 1984 Tax Reform Act has not had the sort of October 1988 / 591 dramatic impact upon library collection develop­ ment that we saw, and continue to see, following the 1969 tax legislation. In general, the survey indi­ cates that the regulations mandated in the 1984 Tax Reform Law have had no profound effect upon the number and kind of noncash gifts to American libraries or upon the procedures used to administrate these transactions. It appears that no significant trend directly stemming from the new regulations has emerged either. The survey did reveal several topics of concern which merit further attention. One such concern, evidenced in the comments of a number of respon­ dents, is the need for up-to-date information about financial, legal, and other relevant issues relating to gifts and appraisals. W ith this in mind, at its Ja n ­ uary 1988 meeting in San Antonio, the Committee proposed the establishment of an ad hoc committee with the charge of preparing an informational bro­ chure, aimed at library donors, which would meet this need. This recom m endation has been ap­ proved and the RBMS Ad Hoc Gifts and Appraisals Brochure Committee, chaired by Stephen Fergu­ son of P rinceton University L ib ra ry , has been charged with preparing the publication. A number of respondents also felt that the new regulations should continue to be monitored even though they have yet to have any significant im ­ pact. One respondent suggested that “case exam­ Rockefeller scholars in residence The Rockefeller Archive Center of Rockefel­ ler University will host its second Scholar in Residence in the general field of the history of p h ila n th ro p y d u rin g th e a c a d e m ic y ear 1989-1990. The purpose of the program is to foster re­ search in the holdings of the Center, which in­ clude the records and papers of the Rockefeller Foundation, Rockefeller University, the Rock­ efeller family, Rockefeller Brothers Fund, and the Commonwealth Fund. The resident scholar will receive a stipend of up to $30,000 for nine months of study and ex­ tensive research at the R ockefeller Archive Center, beginning on September 1, 1989. Ap­ plications are encouraged from established re­ searchers and scholars in fields generally re­ lated to the history of philanthropy. The application should include a curriculum vita, a letter detailing the candidate’s research interests and demonstrating fam iliarity with the Center’s holdings, and letters of reference from three persons familiar with a candidate's research and scholarship . T h e a p p lica tio n deadline is April 1, 1989. Address inquiries to: Darwin H. Stapleton, Director, Rockefeller Archive Center, Pocan- tico Hills, North Tarry town, NY 10591. ples would be useful to ensure that we are, in fact, doing what we should be doing.” The Committee encourages individuals either from within or out­ side of the original survey group to contact the Committee chair if they have additional experi­ ences or relevant comments to report concerning the 1984 regulations. The Committee would also welcome reports from librarians on the effect of the Tax Reform Act of 1986, which also included pro­ visions with the potential to affect donations to American libraries. Although the Committee’s sur­ vey concerned itself solely with the 1984 regula­ tions, even as it was being distributed, discussions concerning the possible effects of the 1986 law were beginning. Finally, the above discussion, for the most part, is a summary of the findings for the most significant areas addressed in the questionnaire. But the sur­ vey questions covered a variety of topics, from gen­ eral administrative and policy matters to specific li­ brary procedures. The results for the entire survey have been compiled into a separate report which is also available from the chair of the Legislative In ­ formation Committee. Beinecke Visiting Fellowships The Beinecke Rare Book and Manuscript L i­ brary, Yale University, offers short-term fel­ lowships to support visiting scholars pursuing post-doctoral or equivalent research in its col­ lections. The fellowships, which support travel to and from New Haven and pay a living allow­ ance of $1,000 per month, are designed prim ar­ ily to provide access to the Library for scholars who reside outside the greater New Haven area. T h e length of a gran t, norm ally one m onth, depends on the applicant’s research proposal. Fellowships must be taken up be­ tween September 1989 and May 1990. Recipi­ ents are expected to be in residence during the period of their award and are encouraged to participate in the activities of Yale University. Applicants are asked to submit a resume and a brief research proposal (not to exceed three pages) to the Director, Beinecke Rare Book and Manuscript Library, Box 1603A Yale Station, New Haven, C T 06520-1603. The proposal should em p h asize th e re la tio n sh ip of the Beinecke collections to the project and state the preferred dates of residence. T he applicant should also arrange to have two confidential letters of recommendation sent to the director. One of those selected to receive an award will be named the Donald G. Gallup Fellow in American Literature. All application materials must be received by January 1 5 ,1 9 8 9 . Awards will be announced in March 1989 for the academic year 1989-1990.