Museums in the United States, and around the world, are coming under attack from various groups because many museums hold what is believed to be Nazi-looted art from the Holocaust. While numerous scholars and researchers have taken it upon themselves to address the potential ways to resolve the disputes, other than litigation, only a handful of publications address what solutions are available for individual current possessors of Nazi-looted art. This article proposes a new look at the already existing Internal Revenue Code as a viable option for current possessors and claimants to effectively and equitably resolve the disputes.
Although there is a growing concern about the use of art investments as tax shelters to encourage the illicit trade in stolen artwork, there is a more subtle, and arguably, more sympathetic view for the favorable use of the Internal Revenue Code (“the tax Code”) in the art and cultural property trade world. Intrinsically linked to the illicit trade in antiquities is the devastation that occurred at the hands of the Nazi regime during World War II. When the Allied troops liberated Paris in 1944, the Nazi regime had pillaged approximately one-fifth to one-third of all the art in Europe. Today, tens of thousands of works of art are still missing, but many items have made their way into museums, private collections, and auction houses in the United States. Thus, an individual or entity in the United States may be unaware—or aware—that a piece of artwork they own has Nazi taint. As the original owners and their heirs’ claims for restitution and other legal claims become more prevalent, individuals and entities are unwilling to hand over the artwork because of their monetary investment in the item.
