Tax Notes Federal
By Robert Ramsay
April 27, 2020
The IRS has declared war on conservation easements. It has dedicated an unprecedented amount of resources to stopping taxpayers from claiming valid deductions, and has named conservation easements among its “dirty dozen” tax scams.
The IRS’ war is inconsistent with the law. Congress asks taxpayers to grant conservation easements to conserve land and reduce development, and in exchange it has promised a tax deduction. There is nothing “dirty” about following a law that Congress enacted and claiming a deduction when a valid conservation easement has been donated. Congress could change this law if it wanted to, but it has not. Treasury could alter the regulations governing how the law operates, but it has not. Instead, the IRS has chosen to deny deductions through audits and litigation — threatening taxpayers for violating rules that don’t exist.