P4C Strongly Supports The Following Legislative Proposals
During the last 40 years, the conservation easement tax incentive in Section 170(h) of the Internal Revenue Code has helped conserve millions of acres of important private land and ensured that our federal and state governments do not alone shoulder the cost and responsibility of land conservation.
Unfortunately, as with many other tax benefits, the conservation easement incentive has led to some rare instances of abuse. In terms of the source and scope of abuse, there is a great deal of misinformation circulating in the media and in the halls of Congress.
P4C is concerned that such legislation would erode private property rights and eliminate an important and national conservation tool. P4C has developed a comprehensive set of proposals that specifically deal with potential conservation easement abuse while preserving the important tax incentive that Congress created to encourage all landowners to consider making conservation easement donations. These proposals include:
- Enhanced appraisal standards for conservation easements. Amend the qualified appraisal rules to require that for conservation easement appraisals, there must be (1) an independent review of an appraisal; (2) independent verification of the feasibility of the “highest and best use” referenced in appraising such an easement, and (3) an independent market study for that “highest and best use.”
- Enhanced education standards for qualified appraisers of conservation easements. Amend the qualified appraisal rules to require that for conservation easement appraisals, the appraiser must have taken a course on valuing conservation easements during the 24 months before completing an appraisal.
- Enhanced visibility and transparency of conservation easement donations. Require tax- exempt conservation easement donees to report such contributions on their annual tax returns (Form 990), including the value of the deduction claimed by the donor. Donees would also be required to make available to the public annually a description of any conservation easement donations they accepted.
- Standards for IRS Appraisers. Require IRS employees and consultants performing conservation easement valuations to have relevant experience and to use the same generally accepted appraisal standards as are required for taxpayers.
- IRS to accept substantial compliance. Require IRS to publish regulations under which taxpayers that have made good faith efforts to comply with the applicable conservation easement donation rules can correct perceived technical problems for prior donations (e.g., by supplying missing information or signatures or amending problematic grant deed language).
- Have the IRS assist taxpayers making conservation easement donations. Direct IRS to release sample conservation easement grant deed language on which taxpayers can rely.