P4C Advocates For Common-Sense Legislative Reforms
Partnership for Conservation (P4C), a diverse coalition of stakeholders in more than 40 states representing the entire conservation easement ecosystem, including land trusts, landowners and others involved in conservation, committed to working with all stakeholders to create an environment in which more pristine lands can be conserved.
That is why we have developed Best Practices and Legislative Proposals that improve the appraisal process and the transparency of easement donations while ensuring that the boom in conservation is able to continue to grow. Common-sense reforms exist that can improve the conservation process without limiting participation.
Unfortunately, misguided policies in Washington, D.C. are threatening to curtail land conservation without adequately addressing the core issues. For example:
- In December 2016, the IRS issued Notice 2017-10, designating certain conservation easement donations by partnerships as “listed transactions” and doing so retroactively back to 2010. The IRS stated that it instituted this sub-regulatory measure due to its concerns that entities have been claiming a tax deduction for a conservation easement based on an overvalued appraisal of the donation. But the Notice does nothing to address overvaluation or enhance appraisal standards. The Notice also lacks evidence, as publicly available statistics show that abuses of valuation with conservation easement donations are rare and are no more likely to come from a wealthy landowner, a family partnership or a partnership of unrelated individuals.
- In March 2018, the IRS compiled a new report of conservation easement donations that it considered to be “listed transactions”. The report included any “substantially similar” conservation easement donations and described transactions between the years 2010 and 2016. Based on information gleaned from the collection of IRS Forms 8886 and 8918, the report contained very large and obvious data errors, as acknowledged by the IRS when it repeatedly states it cannot validate the accuracy of the reported numbers, nor did it remove duplicate and invalid data. Lastly, the report notes that the vast majority of taxpayers involved in conservation partnerships have complied with the IRS conservation easement disclosure requirements.
P4C believes that common sense improvements to the current conservation easement legislation can and should be made, and that’s why our best practices include detailed recommendations to help landowners obtain accurate and complete appraisals, while also ensuring that qualified appraisals adequately address the market feasibility and highest and best use of the property. It’s also why we developed comprehensive legislative proposals. Our proposals include:
- Enhancing the definition of a “qualified appraisal” to produce more accurate and well-substantiated valuations.
- Bolstering the educational requirements to be a “qualified appraiser” in order to ensure appraisers have sufficient training and expertise.
- Producing greater visibility and transparency of conservation easement donations.
One-sided, unverified reports from government agencies are not helpful. It is up to Congress to advance common-sense reforms so that conservation efforts can continue to expand.
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