Newest IRS Action in Conservation Easement Disputes: Same Data Used Against Different Parties



In September 2020, the IRS instructed its personnel to gather and utilize, for multiple purposes and proceedings, all data possible about SCETs and SSTs. The IRS also indicated that such multi-tasking and data sharing, involving lots of unrelated parties and transactions, would not violate the general prohibition against disclosure of returns and return information found in Section 6103. The IRS, in essence, announced that it will attempt to present as much evidence as possible, relating to partnerships, promoters, appraisers, accommodating parties, and others, in overlapping tax audits, investigations, and litigation.

This article:

  • Summarizes conservation easement donations and related tax deductions
  • Identifies the parties that the IRS is now pursuing
  • Explains the non-disclosure rules and applicable exceptions
  • Unpacks three IRS pronouncements attempting to justify potential violations of taxpayer protections and evidentiary rules
  • Reminds partnerships and others affiliated with SCETs and SSTs of the importance of understanding the IRS’s strategies and implanting processes to defend against them from the outset

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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