The IRS has updated its Conservation Easement website to expand guidance on abusive conservation easement transactions. In the announcement, the IRS stated that promoter-driven conservation easement arrangements often rely on inflated property valuations generating improper charitable deductions. According to the agency, taxpayers participating in such transactions risk disallowed deductions, substantial penalties and other enforcement consequences. IRS Chief Executive Officer Frank J. Bisignano stated that Congress intended conservation easement deductions to support legitimate land preservation efforts rather than abusive tax shelters.
Further, the IRS announced that it will soon release terms for a limited-time settlement initiative for eligible taxpayers involved in these transactions. Eligible partnerships may receive settlement offers intended to resolve federal tax liabilities arising from disputed conservation easement deductions. Acting IRS Chief Counsel Kenneth J. Kies stated that courts have repeatedly rejected abusive conservation easement arrangements and upheld major reductions in deductions and significant penalties. The updated website includes additional explanations regarding ongoing IRS enforcement efforts and litigation developments involving syndicated conservation easement transactions.
