Congressional and Academic Scrutiny of Conservation Easements Continues

We have previously blogged about congressional, DOJ, and IRS scrutiny of conservation easement donations, as well as academic coverage of this topic led by our contributing editor, Nancy A. McLaughlin (Utah). This scrutiny shows no signs of abating, with the following developments just in the past couple of months:

• Senators Chuck Grassley and Ron Wyden, Chair and ranking member of the Senate Finance Committee, sent three letters in June asking for further answers to their questions relating to syndicated conservation easements. Hat tip: Tax Analysts (Fred Stokeld) (subscription required).

• The Joint Committee on Taxation issued a report last month concluding that enactment of the Charitable Conservation Easement Program Integrity Act of 2019 (S. 170), which is designed to end abusive conservation easement tax breaks would raise $6.6 billion over several years. The JCT letter is available from Tax Analysts (subscription required).

• That followed a June report (revised slightly in July) from the Congressional Research Service describing the concerns regarding abuse of conservation easement tax breaks.

• It also coincided with three recent publications relating to conservation articles, including from the ABA Real Property Trust and Estate Conservation Easement Task Force (Recommendations Regarding Conservation Easements and Federal Tax Law), attorney Jenny L. Johnson Ware of the Johnson Moore LLC firm (Valuing Conservation Easements: An Empirical Analysis of Decided Cases), and Professor McLaughlin, who posted an updated version of Trying Times: Conservation Easements and Federal Tax Law (last revised June 2019).

With organizations that support appropriate tax breaks for legitimate conservation easements, such as the Land Trust Alliance, trying to avoid having Congress throw the baby out with the bath water, while DOJ and the IRS battle promoters and contributors of allegedly abusive conservation easement donations in the courts, it will be interesting to see how this issue ultimately shakes out both legislatively and in litigation.

Lloyd Mayer