Humane Society Investigation Uncovered Abuse: Provision Included in Pension Legislation by Senator Grassley Saves American Taxpayers $49 Million Over Next Decade and Slows Trophy Hunting Excursions
WASHINGTON – The Humane Society of the United States today praised the U.S. Senate for including a provision in the Pension Reform Act, passed last night by the Senate and last week by the House of Representatives, to close a loophole in the tax code that has been exploited by trophy hunters and allowed them to unfairly deduct the costs of their hunting excursions across the globe. The HSUS uncovered the scam and brought it to the attention of Senator Charles Grassley (R-IA), who shepherded the taxidermy tax scam provision to passage.
The inclusion of this provision will help protect wildlife around the world and save American taxpayers an estimated $49 million over the next decade. The president is expected to sign the Pension Protection Act, which was approved by wide margins in both chambers.
"The phoniness of this kind of donation called out for congressional action," Grassley said. "It was time for self-enriching hunters to become the hunted. Thanks to the Humane Society of the United States, we're taking the tax cheating out of taxidermy. I'm grateful for the group's diligent work in exposing this scam in the first place and then helping Congress shut it down."
A two-year investigation by The HSUS revealed that some trophy hunters were shooting rare animals around the world and donating their mounted prizes to phony museums in order to take a tax deduction. It didn't matter if the pseudo-museum was set up in the hunter's own living room. Investigators even found 800 "donated" trophy mounts gathering dust in an old railroad car.
"This safari swindle involved a big-game hunter shooting an exotic animal in Asia, in Africa, or at a drive-through 'canned hunt' here in the United States – and writing off his hunting trip at the expense of the IRS and American taxpayers," said Michael Markarian, executive vice president of The HSUS. "The trophy hunting boondoggle bilked the federal Treasury of millions of dollars, and encouraged more killing of wildlife, including rare species. This fraud went on too long, but Congress has now acted to make the law unambiguous and prohibit individuals from engaging in this shameful tax dodge."
The tax deductions were engineered by unscrupulous trophy appraisers that advertised with slogans like "Hunt For Free," "Hunting in a Tight Money Economy," and "7 Secrets of Tax Deductible Hunting." The appraisals of trophy animals were extraordinarily generous, and often made by viewing photos, never seeing the actual mount. By calculating the cost of airfare, guide fees, licenses, hunting permits, skinners, trackers, shipping, taxidermy, tips for guides and other expenses, each hunt could pay for the next. In an ironic twist, the more animals that were hunted, the more rare the species became, and thus the higher "replacement value" of the animal and tax break to the hunter.
To curb this abuse, Senator Grassley, chairman of the Senate Finance Committee, advocated for language specifying that trophy mount donations must have "comparable sales data" to accompany IRS tax forms claiming the donation. So instead of claiming the cost of flying to Africa to kill an antelope and writing off the expense of the trip, a donor can now only claim what it would cost to buy the antelope trophy on the open market, a figure that will be a fraction of the amount of the phony appraisals that were routinely occurring. For donations valued at more than $5,000, donors will have to obtain an appraisal by the IRS Art Board or by a certified agent, again using comparable sales figures.
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The Humane Society of the United States is the nation's largest animal protection organization with more than 9.5 million members and constituents. The HSUS is a mainstream voice for animals, with active programs in companion animals, disaster preparedness and response, wildlife and habitat protection, marine mammals, animals in research, equine protection, and farm animal welfare. The HSUS protects all animals through education, investigation, litigation, legislation, advocacy and field work. The nonprofit organization is based in Washington and has field representatives and offices across the country. On the web at www.hsus.org.
