Conservation Easement Enforcement: IRS Quietly Eliminates Procedural Protections for Appraisers



Unless somebody has been living under the proverbial rock the past few years, he is aware that the IRS is aggressively attacking “syndicated” partnerships that donate conservation easements to charity and claim the related tax deductions. This is common knowledge. What many people do not realize, though, is that the IRS is pursuing others involved with easement donations, and methodically changing the rules to achieve its goals. For instance, with absolutely no fanfare, the IRS released in late January 2020 what appeared to be a routine, innocuous, procedural memorandum called “Interim Guidance on IRC 6695A Penalty Case Reviews” (“Interim Guidance”). The reality is that this Interim Guidance triggers a critical change, eliminating the multi-level review procedure formerly used by the IRS to protect appraisers against improper penalties and disciplinary referrals. This article explains the main concepts around easement donations, categories of IRS attacks against partnerships, evolution of the appraiser penalty rules, and impacts of the new Interim Guidance.

This article examines:

  • The main concepts around conservation easement donations
  • Categories of IRS attacks against partnerships
  • Evolution of the appraiser penalty rules
  • Impacts of new IRS guidance.

About Hale E. Sheppard

HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.) is a Shareholder in the Tax Controversy Section of Chamberlain Hrdlicka and Chair of the International Tax Group.

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