Admittedly this is personal.
Over 50 years ago, the IRS created a program called a conservation easement through a revenue ruling. Its goal was to protect nature, stop development, and save working lands. Landowners received a tax incentive for voluntarily setting aside a portion of their land from development. I did these as part of estate planning for clients who wanted to preserve land they owned, and often worked with non-profits and governmental entities to achieve the management of these properties. Also helped some developers do this as part of environmental mitigation for their projects. The developer took tax deductions for these easements as an ordinary business expense and not under the IRS guidance.
The tax break was made permanent in 1980 and has been part of the tax code ever since.That's right it is the law.
A bipartisan Senate Finance Committee investigation identified serious abuses in some syndicated conservation-easement transactions, particularly deals involving inflated land valuations. But evidence that three were promoters who abused the deduction does not give the IRS license to presume that every transaction was fraudulent or that every investor knowingly participated in a tax shelter, and reverse its ruling that conservation easements are legal. Some of my clients who did this are deceased (this was more estate planning for them, than tax related), and others are elderly and a growing number facing audits. They also were generally liberal and pro environmentalists. The iRS is simply denying the deduction even though it is law at this point, without even asking questions about valuation, etc.
Over 50 years ago, the IRS created a program called a conservation easement through a revenue ruling. Its goal was to protect nature, stop development, and save working lands. Landowners received a tax incentive for voluntarily setting aside a portion of their land from development. I did these as part of estate planning for clients who wanted to preserve land they owned, and often worked with non-profits and governmental entities to achieve the management of these properties. Also helped some developers do this as part of environmental mitigation for their projects. The developer took tax deductions for these easements as an ordinary business expense and not under the IRS guidance.
The tax break was made permanent in 1980 and has been part of the tax code ever since.That's right it is the law.
A bipartisan Senate Finance Committee investigation identified serious abuses in some syndicated conservation-easement transactions, particularly deals involving inflated land valuations. But evidence that three were promoters who abused the deduction does not give the IRS license to presume that every transaction was fraudulent or that every investor knowingly participated in a tax shelter, and reverse its ruling that conservation easements are legal. Some of my clients who did this are deceased (this was more estate planning for them, than tax related), and others are elderly and a growing number facing audits. They also were generally liberal and pro environmentalists. The iRS is simply denying the deduction even though it is law at this point, without even asking questions about valuation, etc.
