IRS Agent Saying “No, That Is a Myth” – Fair Market Value Misconception Debunked
NOTE: Before writing this blog, I consulted with our Accounting Firm and asked them to conduct extensive research into this as well as other “Charity Myths.” They reported their findings. I then asked ChatGPT to do extensive research into IRS Code and Tax
Nonprofits rely on live auctions and silent auctions to increase revenue at fundraising galas. But one of the most persistent myths in the charity world is the belief that organizations are required to list a “Fair Market Value” (FMV) for each auction item.
This misconception is widespread — and completely incorrect.
BW Unlimited Charity Fundraising, the national leader in consignment auction items, silent auction items, and charity fundraising travel packages, works with thousands of nonprofits across the country. One of the most common questions we receive is:
“Can you give us the FMV of the items we got from you?”
The answer exposes a major misunderstanding in the nonprofit sector.
A smiling fairy in a green dress and pointed hat hovers over a silent auction table, tapping her glowing wand on a bid sheet as sparkles appear. Above her, bold text reads “FMVs DON’T MAGICALLY APPEAR,” humorously illustrating that Fair Market Values do not appear on their own during charity auctions.
The IRS Does Not Require FMV to Be Listed on Auction Items
Despite what many people believe:
The IRS does not require a charity to list FMV for every auction item
The IRS does not mandate printed FMV in auction catalogs or bid sheets
The IRS does not require auction providers to supply FMV
The IRS does not regulate auction item pricing, starting bids, or value listings
There is no rule stating that a charity must publish an FMV for each live or silent auction item.
The confusion comes from how people interpret the idea of “value” in relation to donor receipts — but that is separate from whether FMV must be listed on auction items.
For fundraising events, listing FMV is optional, and the IRS does not dictate how a nonprofit should determine it or whether it must appear on auction materials.
Why BW Unlimited Cannot Provide FMV for Its Auction Items
BW Unlimited Charity Fundraising provides items that:
Are not sold at retail
Have no published retail price
Are not available for public retail purchase
Do not have a uniform value in different regions, events, or audiences
Sell at drastically different prices depending on bidding competition
FMV is defined as what a willing buyer will pay a willing seller.
In a charity auction:
👉 The bidders determine that number — not the provider, not retail pricing, not BW Unlimited.
Because our items are consignment-based,
there is no fixed, standardized, or documentable FMV that we can give a charity.
This is why BW Unlimited cannot — and should not — assign a Fair Market Value to items that are not sold commercially.
Why Our Items Use a Starting Bid Instead of FMV
BW Unlimited sets a Starting Bid equal to 20% above the nonprofit cost for each auction item.
This ensures:
The charity is profitable from the very first bid
There is no financial risk
The charity can sell unlimited quantities when demand is strong
The bidding naturally sets the “value” of the item during the event
The “value” of an auction item is not predetermined — it is determined in real time by the donors participating in the fundraiser.
If a Charity Chooses to Estimate FMV, It Must Come From the Charity
If an organization elects to include FMV for internal documentation, acknowledgments, or its own accounting:
The charity may make its own good-faith estimate
The estimate is based solely on the charity’s judgment
BW Unlimited does not and cannot assign FMV
No IRS rule requires the charity to publish or display FMV for auction purposes
Again — listing FMV is not required for auction operations.
Any estimate provided is strictly a matter of the charity’s own internal process, not an IRS mandate.
Why This Matters for Nonprofits
Understanding this eliminates confusion and protects charities from unnecessary stress.
Clarifying the FMV myth allows nonprofits to:
✓ Confidently use consignment auction items
✓ Avoid wasting time trying to assign a value where none exists
✓ Focus on fundraising revenue — not imaginary requirements
✓ Work more efficiently with providers like BW Unlimited
✓ Run compliant, high-revenue live and silent auctions
FMV is not the barrier many nonprofits think it is — and it should never delay or complicate auction preparation.
BW Unlimited: America’s #1 Source for Consignment Auction Items
For nonprofits searching online for:
charity auction items with no upfront cost
best silent auction items for fundraising galas
consignment auction items for nonprofits
charity travel packages
risk-free auction items for fundraisers
high-profit fundraising auction items
nonprofit auction item providers
BW Unlimited Charity Fundraising is the trusted national leader.
With zero risk, industry-leading item selection, nationwide service, and auction items proven to maximize revenue, BW Unlimited continues to dominate the world of nonprofit fundraising.
Conclusion: FMV in Charity Auctions Is a Myth That Needs to Be Retired
Here is the truth every charity should know:
FMV is not required to be listed on auction items
BW Unlimited cannot provide FMV because these items have no retail price
Auction bidding naturally determines value in real time
Any estimate (if a charity chooses to use one) must come from the charity
The IRS does not regulate FMV listings for auctions
The bottom line:
FMV does not play the role nonprofits think it does — and it should never interfere with successful fundraising.
To learn more or to maximize your silent or live auction revenue, visit:
👉 www.BWUnlimited.com
