IRS Conservation Easement Stance Must Be Tested at Trial

The IRS hasn’t met its burden for proving a trial isn’t needed to determine whether the agency justifiably blocked a $26 million deduction for giving away land development rights, the U.S. Tax Court ruled.

In its Tuesday opinion, the court rejected the agency’s request for a judgment that it properly disallowed the deduction claimed by Morgan Run Partners LLC for donating a conservation easement, where a land or building owner gives away property development rights for conservation reasons. Donors may claim deductions if they meet the requirements under tax code Section 170(h), including that the conservation purpose of ...