WASHINGTON, D.C. — The Internal Revenue Service updated its Conservation Easement site to expand information on abusive conservation easement transactions, recent court rulings and warning signs tied to promoter-driven tax shelter schemes.
The IRS said the updated guidance explains how abusive conservation easement arrangements often rely on inflated property valuations that can result in disallowed deductions, penalties and other consequences for taxpayers.
Frank J. Bisignano, chief executive officer of the IRS, said Congress intended conservation easement deductions to support legitimate land preservation efforts rather than tax shelters.
“Congress created the conservation easement deduction to encourage genuine preservation, not to subsidize abusive tax shelters,” Bisignano said. “The updated information on IRS.gov explains why the IRS continues to challenge these transactions and highlights the serious risks taxpayers face when they are sold inflated tax benefits disguised as conservation.”
The agency also said it plans to release terms for a limited-time settlement program for eligible taxpayers involved in the transactions. After the announcement, the IRS said it will extend settlement offers to qualifying partnerships to resolve related federal tax liabilities.
Kenneth J. Kies, acting IRS chief counsel, said courts have repeatedly ruled against abusive conservation easement arrangements.
“The courts have repeatedly rejected abusive conservation easement arrangements, often sustaining major reductions in claimed deductions and significant penalties,” Kies said. “Taxpayers and their advisors should carefully review the updated information and the settlement terms when they are announced.”
The updated conservation easement information is available through the IRS at Conservation Easements.
Support the local news that supports Chester County. MyChesCo delivers reliable, fact-based reporting and essential community resources—free for everyone. If you value that, click here to become a patron today.