Tax Blog

IRS and Abusive Conservation Easements

photo by Mitchell Chadwick

The IRS has been cracking down on abusive conservation easements lately. Congress has written and passed laws encouraging conservation easement donations. Conservation easements are grants of beneficial use to a qualified organization (charity or state) for exclusive conservation purposes, in perpetuity, but must not be excess benefit transactions. The rules are convoluted and confusing, apparently on purpose created by Congress. The intent of Congress was to encourage conservation easements and take the deduction. The IRS has spotted and litigated numerous abuses that have gone on.

Note: The written letter of law is easy to comply with as it is a very loosely written statute. What is not easy to comply with is the IRS audit manual regarding the topic. Taxpayers are advised to consult with an expert on the subject that has followed case law on conservation easements if they choose this tax strategy.

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