Private musems are facing congressional scrutiny over their tax-exempt status, with a top lawmaker questioning the public benefits of allowing benefactors to receive tax breaks for collections that the public might have only limited ability to view.
Sen. Orrin Hatch, the Republican chairman of the Senate Finance Committee, said Thursday that he had finished a review of tax-exempt private museums and told IRS Commissioner John Koskinen in a letter that he remains “concerned that this area of our tax code is ripe for exploitation.”
From a survey sent out to private museums in November, Hatch found that some private museums effectively limit visitors by requiring reservations weeks or months ahead of time, or by limiting viewing hours to as few as 20 a week.
The survey also indicated that many private musems are closely associated with the founding donors. In some cases, they are located on or right next to the donor’s residence, and in other cases the donor is responsible for managing and operating the museum, blurring the line between a museum open to the public and a private collection in someone’s house.
At issue are private museums founded by wealthy art collectors, which have grown in number in recent years. The trend was noted in a 2015 New York Times article, later referred to by Hatch, that highlighted the Brant Foundation Art Study Center, the private museum just down the road from its founder, businessman Peter Brant, and Glenstone, a museum in Potomac, Md., separated from founder businessman Mitchell Rales’ house by a duck pond.
Such museums have become more prevalent as art prices have soared. Benefactors can write off the cost of pieces of artwork they donate under current law.
