Conservation Easements Update: Cert. Denial; Hearing on Proposed Regs; New Articles

The long legal grind relating to conservation easements continues, with no end in sight. Setting aside the periodic issuance of dispositive and procedural decisions in the many pending cases – about half-a-dozen such decisions over the past three or so months by my count – there have been two significant developments and two new articles of interest.

First, the Supreme Court of the United States denied certiorari in Oakbrook Land Holdings, LLC v. Commissioner, one of two federal appellate court decisions that had created a circuit split over the validity of a conservation easement regulation. The Court apparently took to heart Professor Michael Kane’s recommendation that it not take up this issue.

Second, the Treasury Department held its public hearing earlier this month on proposed regulations designed to address court decisions holding syndicated conservation easement listing Notice 2017-10 to be invalid under the Administrative Procedure Act. According to a Thompson Reuters article, many commentators urged Treasury to retain a carveout for donee organizations. According to a Law360 article, some of the commentators also questioned whether the proposed regulations are needed now that Congress has enacted a new charitable deduction disallowance rule for certain conservation easement contributions. 

As for the articles, Vanderbilt Law Review has published a note authored by Molly Teague and titled Conservation Options: Conservation Easements, Flexibility, and the “In Perpetuity” Requirement of IRC § 170(h). And the Wildlife Society Bulletin published a short article by several scholars titled Conservation Easements: A Tool for Preserving Wildlife Habitat on Private Lands and proposing “a shift from primarily negative clauses and restrictive language to a more affirmative approach, developing language to proactively improve management of properties under conservation easement in order to maximize benefits to wildlife and ecosystems.”

Lloyd Mayer