IRS and Congress Waging Misguided War on Environmental Tax Deduction

National Taxpayers Union
Pete Sepp
April 12, 2019

Enormous bipartisan progress has been made in recent decades on environmental conservation, a policy area that has evolved as the country has grown, and its needs have changed. In particular, a thoughtful policy consensus has solidified around allowing the tax code to recognize the importance of charitable easements on property for conservation and preservation purposes.

This easement tax deduction has been a tremendous success, enabling tens of millions of acres to be set aside and maintained by private citizens and organizations. Yet this critical tool for protecting the environment is threatened by an overzealous Internal Revenue Service through heavy-handed administrative tactics. Congress needs to send clear signals to the IRS that its war on conservation easement deductions is shortsighted, but also there are unfortunately some lawmakers whose proposals would exacerbate what the IRS is doing and harm the future of private conservation.

Conservation easements, where an individual or individuals in a partnership give up their rights to develop their land in exchange for a tax deduction reflecting the value of those rights, have shown to be highly successful. Enacted in its current form in 2006, the tax deduction for conservation easements was made permanent in 2015, leading to over 27 million acres of vital habitats and historically important areas being conserved today as a result of easements.

Congress has repeatedly acknowledged the benefit of maximizing private participation in conservation in its debate over the conservation easement deduction. However, the IRS has undertaken aggressive audit and litigation actions that would stifle the use of conservation easements throughout the country, contradicting both the letter and intent of the law.

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