There has been increasing IRS attention to donations of conservation easements, resulting in several recent tax court cases. The Land Trust Alliance continues to support ethical, legal, and technically sound conservation easements but also recognizes that there are "bad easements" out there. We support the new reforms for appraisals and appraisers that passed as part of H.R. 4 in August of 2006. Learn more about those reforms.

IRS Response to Alliance Inquiry About Habitat Conservation Purpose

When the Land Trust Alliance heard that IRS agents in Colorado were telling easement donors that their easement did not qualify as protecting "a relatively natural habitat of fish, wildlife or plants" because it did not protect endangered species, we asked the IRS to confirm that this was NOT a requirement of the law.  The letter below confirms that. (12/20/2006)

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IRS Letter About Natural Habitat Conservation Purpose

Glass vs. Commissioner UPDATE

The Land Trust Alliance and the Little Traverse Conservancy submitted a "friend of the court" brief in response to the IRS's appeal of a Tax Court verdict. The IRS argues for new and very narrow interpretations of what wildlife habitat is "significant" enough that its protection with a conservation easement would merit a tax deduction. The Alliance argues for a more inclusive interpretation.

On December 21, 2006, the 6th Circuit Court of Appeals ruled on the Glass case rejecting the IRS's arguments for a greatly narrower reading of what qualifies for protection with a tax-deductible donation of a conservation easement. The IRS's very narrow view of how stringent the protection the easement provides must be was also rejected. The IRS had argued that the easement cannot allow virtually any activity that could conceivably harm conservation values, under any circumstances. See the Circuit Court's decision below.

(134 KB)	Analysis of Glass Case: Prepared by Rob Levin NEW!
(110 KB)	IRS Appeal of the Tax Court Decision
(106 KB)	Land Trust Alliance and Little Traverse Amicus Brief
(536 KB)	Glass Appellee Brief
(1132 KB)	IRS Reply in Response to Land Trust Alliance and Little Traverse Amicus Brief
(63 KB)	6th Circuit Court of Appeals Decision

Ney vs. Commissioner

In this case, the IRS questioned the validity of the easement donation on two parcels of farmland owned by Bruce and Marina Ney. The IRS claimed that the petitioners did not comply with written substantiation requirements and they denied the charitable deduction. The Ney's appealed the IRS decision in court. Ultimately, the tax court agreed with the IRS, citing the lack of a qualified appraisal at the time of donation and the failure to obtain the appraiser's signature on Form 8283. Learn more about written substantiation requirements.

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Ney vs. Commissionor Summary Opinion

Turner vs. Commissioner

In May of 2006, the U.S. Tax Court disqualified a donated conservation easement for a tax deduction for failing to meet the specific standards of the tax law. The easement was donated by a real estate company to the county government. No land trust was involved. Land Trust Alliance agrees with the IRS in this case, and supports the decision that the easement did not meet the standards of the law. We applaud the court and the IRS for showing that enforcement of the existing law can work.

updated 12/20/06