Did a bald eagle turn a valuable artwork into a white elephant? Heirs of legendary art dealer Ileana Sonnabend say yes, but officials at the U.S. Internal Revenue Service disagree.
The dispute centers on Robert Rauschenberg’s seminal 1959 “combine” work Canyon, which, under U.S. law, cannot ever be sold since it contains a stuffed bald eagle, a violation of the country’s 1940 Bald and Golden Eagle Protection Act as well as the 1918 Migratory Bird Treaty Act. The law provides criminal penalties for persons who “take, possess, sell, purchase, barter, offer to sell, purchase or barter, transport, export or import, at any time or any manner, any bald eagle . . . alive or dead, or any part, nest, or egg thereof,” according to the U.S. Fish and Wildlife Service website.
As a result, Sonnabend’s heirs, and three qualified appraisers, have valued the unsalable work at “zero” for estate-tax purposes. However, the IRS Art Advisory Panel arrived at a different market value for the work. Its estimate? $65 million.
In late October, the IRS sent the estate a “Notice of Deficiency” informing the heirs that they must pay another $29.2 million in taxes, as well as a related penalty of $11.7 million. Ralph Lerner, an art-law specialist who is representing the Sonnabend estate, has sued the IRS in U.S. tax court, telling ARTnews he will “fight to the end” on this issue. An IRS spokesman declined to respond, noting that the agency does not comment on pending litigation.
Lerner says when he talked to Joseph Bothwell, then the interim head of the Art Advisory Panel, “he told me there could be a market for the work. For example, a recluse billionaire in China might want to buy it and hide it. Of course there was no response when I pointed out that it is a criminal violation to export the work and it could never get through customs.”
Lerner told ARTnews that the first IRS notice the estate received for Canyon, last fall, contained a suggested valuation of $15 million. He refused to pay. Weeks later, he received the formal Notice of Deficiency that increased Canyon’s value to $65 million. “How do you get a $50 million increase in value in a period of several weeks?” he asks.
Lerner and other art experts are puzzled by the $65 million valuation, even accounting for the iconic status of the work and the artist. The top price ever paid for a Rauschenberg at auction is $14.6 million, for Overdrive (1962), which sold at Sotheby’s in May 2008.
Lerner says the IRS appears to be relying on the lofty heights reached by other contemporary works, namely Andy Warhol’s Green Car Crash (Green Burning Car I), 1963, which sold for $71.7 million at Christie’s New York in May 2007.
When Sonnabend died in October 2007, at the age of 92, her heirs—daughter Nina Sundell and the dealer’s adopted son, Antonio Homem—were faced with an estate in which the artwork alone was valued at over $1 billion. Sonnabend, a pioneering dealer of postwar and contemporary art for more than four decades, also assembled a world-class collection, including works by Jasper Johns, Jeff Koons, Roy Lichtenstein, Cy Twombly, and Andy Warhol.
In order to meet the hefty estate taxes—the federal portion of which was $331 million, most of that for the art—Sonnabend’s heirs sold off some $600 million worth of art in two major private transactions to leading dealers. The first batch, worth about $400 million, was reportedly sold to GPS Partners, based in New York and Paris, which is headed by private dealers Franck Giraud, Lionel Pissarro, and Philippe Ségalot. The second group, said to consist entirely of works by Warhol, was sold to the Gagosian Gallery for $200 million.
Rauschenberg’s “combines,” a series of three-dimensional wall-hung and freestanding works, mostly made in the ’50s and early ’60s, incorporate found items with painting and other mediums. They are considered among his most important works, for the manner in which he reimagined and reinvented collage.
In Canyon, the artist explored themes presented in Rembrandt’s famous painting The Rape of Ganymede, 1635. In Greek mythology, Zeus assumed the form of an eagle to abduct a boy named Ganymede. In the painting, Ganymede is depicted as terrified and crying as he hangs from the eagle’s beak, with his naked buttocks facing the viewer. In Rauschenberg’s version, a stuffed bald eagle with wings spread flies outward from the bottom of a canvas with rough, primitive images and black paint. A rope dangling from the canvas holds a pillow tied in the center, a reference, art experts say, to the young boy’s exposed buttocks.
Sonnabend acquired Canyon in 1959 from a show at the gallery of her former husband, Leo Castelli. But it wasn’t until some 20 years later that Sonnabend learned the stuffed eagle would ruffle feathers.
At first, Canyon was often loaned to major museum venues in the United States and Europe. It was included in the Venice Biennale in 1964, the year that Rauschenberg won the grand prize for a foreign artist. However, in 1981, as the work returned to the United States following an exhibition tour in Europe, Fish and Wildlife agents became aware “of the peculiar situation involving a protected bird carcass that was affixed to a great American masterwork,” according to Lerner’s account. Agents notified the Sonnabend Gallery that restrictions written into the bald-eagle and migratory-bird acts applied to the artwork.
Sonnabend applied for and received a special permit under which she was permitted to retain possession of the bird carcass. In 1982, Canyon was placed on extended loan to the Baltimore Museum of Art, where it remained on view until 2003, periodically traveling to other public venues for exhibitions. The work currently hangs in the 20th-century galleries at the Metropolitan Museum of Art, where it remains on long-term loan.
After it first drew attention, U.S. officials stipulated that the whereabouts of Canyon must always be on record and that the work could never be sold, either within or outside the United States, as an export permit would never be granted. While Sonnabend was permitted to send the work abroad for museum exhibitions, she had to obtain a special export license to do so.
But in 1998, when the Guggenheim organized a Rauschenberg retrospective, Sonnabend’s registrar, Laura Bloom, encountered resistance from a new administrator at the Department of the Interior when she applied for a CITES (Convention on International Trade in Endangered Species, 1975) certificate, which would allow the painting to be exported for exhibition purposes. That May, Bloom received a letter from Diane Pence, the nongame-migratory-bird coordinator, a position within the Fish and Wildlife Service, who said the department had been in error previously when permits had been issued to the Sonnabend Gallery to retain possession of Canyon, as the statutes clearly stated that such permits should only be granted to nonprofit institutions.
Pence put the gallery on notice that she planned to revoke its permit unless it could provide proof of nonprofit status or evidence that the bird was killed and stuffed prior to 1940.
Rauschenberg came to the rescue. In a notarized statement, he recounted that an artist named Sari Dienes lived in the building above Carnegie Hall in New York during the 1950s. Among the other tenants was a member of Teddy Roosevelt’s Rough Riders, the first U.S. Volunteer Cavalry. The man, who was not named, “acquired from the wild, a bald eagle which he had taxidermied prior to 1940,” the statement said. After the man died in 1959, Dienes retrieved the eagle from the trash and offered it to Rauschenberg.
The information allowed Sonnabend to retain possession of the eagle, and confirmed that she was the rightful owner. However, the gallery was unable to obtain a special export permit, and as a result the work did not appear in Bilbao when the 1998 retrospective traveled to Spain.
Lerner has expressed frustration that the estate and its heirs are currently faced with what is essentially a no-win situation, particularly since the dealer complied with strict government regulations for more than three decades.
Says Lerner: “The IRS is saying you have to pay the tax. If you sell the work to raise the money to pay the tax, it’s a criminal offense and you go to jail.”
Eileen Kinsella is editor of the ARTnewsletter.