IRS Loses $76 Million Easement Case by Adjusting Taxes Too Late

The government attempted to adjust a partnership’s taxes after it was allowed to do so, the US Tax Court said, invalidating a change that blocked a $76 million conservation easement deduction.

Judge Jeffrey S. Arbeit granted summary judgment to Bayou Serpent Property LLC after determining that the government attempted to adjust the partnership’s taxes to disallow the donation more than 60 days after the deadline for doing so. He based his ruling on a prior Tax Court case in a $2 million Section 1231 dispute, finding it “squarely on point.”

The partnership in the earlier opinion prevailed based on the ...