IRS Faces Records Lawsuit Over Charitable Deduction Penalties

Conservation easement donors sued the IRS for allegedly failing to timely process their requests for records concerning the agency’s possible backdating of penalties in cases where the government disallowed charitable deductions for such easements.

Rim Rock Aggregates LLC and Top Rope Holdings LLC each donated an easement on separate properties in December 2018 and their constituent partners claimed charitable contribution deductions for a portion of those donations. The IRS issued adjustments to each partnership disallowing the deductions and asserting valuation misstatement penalties. But IRS agents might have failed to acquire supervisory approval before making the assessments, the partnerships said.

Rim ...