In Defense Of Conservation Easement Charitable Deductions

Thanks for your coverage over the past few years of a variety of different Tax Court cases related to conservation easement donation.  There has certainly been a recent increase in these types of cases and since 2005, there have been more than 70 opinions related to the federal income tax deduction claimed for conservation easement donations under Section § 170(h) of the Internal Revenue Code.  These opinions have addressed a variety of issues ranging from the fundamental qualification of the donation as a “conservation easement”, to the valuation of the donation, and to other technical compliance issues.

Looking exclusively at these cases, an outside observer could conclude that conservation easements create the potential for a tax “scam” that is lining the pockets of landowners with unwarranted charitable gift deductions.  As a professional land conservation staff member working directly with landowners who have decided to preserve and protected the land they love I can confidently say that this body of case law does not represent the land conservation movement as a whole.

The truth is that these 70 plus cases represent a very small minority of land conservation activities across the nation. There are more than 1,700 land trust working at the local level to preserve wildlife habitat area, ecosystems that produce clean water and air, scenic rural landscapes and recreation areas, historic sites such as civil war battlefields, and productive agricultural and forestry resources that supply our nation with food and timber.

Working within their own community these groups have harnessed local enthusiasm and voluntary action to permanently preserve and protect as much as one million acres per year. Since the 1970’s, there have been tens of thousands of conservation easements donated on tens of millions of acres to conservation groups across the nation.  The cases brought by the IRS and state tax departments represent far less than 1 percent of the donations that happen in even one year.

 More importantly, the land trust community has been working hard to raise the bar and increase the quality and robust nature of the private voluntary land conservation work being done in America.  It is important to us that our conservation activities are done in a professional and sustainable manner. These cases have provided useful a road map for what not to do and have helped shed light on where land trusts should look for abuse.  The lessons learned from the case law are vital to the future success of land conservation.

Toward that same goal of increasing quality, at the national level, the land trust Alliance established an Accreditation Commission that graduated the first class of accredited land trusts in 2008.  Since then, the Commission has awarded accreditation to over 300 land trusts that meet national standards for excellence, uphold the public trust, and ensure that conservation efforts are permanent. Accreditation is not a one-time action; it fosters continuous improvement as land trusts maintain their accredited status by applying for renewal every five years.

At the local level, land trusts such as The Piedmont Environmental Council (PEC) are offering continuing legal education workshops for legal and tax practitioners who are advising landowners on conservation easement donations.  For example, on June 29th PEC is hosting a workshop with presentations from IRS attorneys, legal scholars, and a US Tax Court Judge as a way or improving the quality and compliance of conservation easement donations in our service area.

If you want to learn more about what you can do to help preserve land in your own community you can find a local land trust through the “Find A Land Trust” web page of the land trust Alliance: http://findalandtrust.org/