Hazy Conservation Easement Guidance Prompts Confusion, Backlogs

Taxpayers are seeking more guidance on conservation easements as the IRS continues to disallow deductions without providing clarity on how to take them without risking a major penalty or costly litigation.

Earlier this year, the US Court of Appeals for the Eleventh Circuit invalidated IRS Notice 2017-10 because the agency should have first gone through a public notice-and-comment period. The notice imposed special reporting requirements on syndicated easements, a subset of conservation easements that allow a promoter to buy land, hire an appraiser to determine a large development value, and solicit investors who themselves can take a deduction.

This practice ...