Partnership Disputes $15.67 Million Conservation Easement Denial

A Georgia-based partnership is contesting the IRS’s refusal to allow a conservation easement as well as a gross valuation misstatement penalty, arguing that its donation and accompanying deduction were made in good faith.

Patton Farm LLC donated the easement on 139 acres of land in Habersham County, Ga., and requested a charitable contribution deduction for the 2017 tax year, citing the value of its noncash contribution donation as at least $15.67 million.

The IRS disallowed the deduction summarily and imposed a 40% penalty.

A conservation easement involves a property owner donating an easement that restricts development on a property in ...