Minority Stakeholders Late to Suit Shut Out of Settlement Talks

Minority stakeholders in a conservation easement partnership who failed to participate in its tax petition must acquiesce to the majority’s settlement agreement with the IRS, the US Tax Court said Thursday.

Chimney Rock Holdings LLC claimed a deduction for its alleged charitable donation of a conservation easement, which the IRS disallowed and responded to with civil fraud and valuation misstatement penalties. Counsel representing Chimney Rock’s tax matters partner, Ornstein-Schuler LLC, consolidated the case with 33 other conservation easement cases to promote judicial economy. After several IRS victories, the parties began discussing a settlement of the 34 consolidated cases.

Two months ...