Proposed regulations issued today by the IRS identify certain syndicated conservation easement transactions as “listed transactions,” a move that followed a recent U.S. Tax Court ruling against the tax agency.
The IRS defines listed transactions as “a transaction that is the same as or substantially similar to one of the types of transactions that the IRS has determined to be a tax avoidance transaction and identified by notice, regulation, or other form of published guidance as a listed transaction.”
Back in June, ProPublica reported on syndicated conservation easements in an article entitled “The Tax Scam That Won’t Die.” The article states:
The government is targeting a tax deduction that goes by the cumbersome name “syndicated conservation easement,” which exploits a charitable tax break that Congress established to encourage preservation of open land. Under standard conservation easements, landowners who give up development rights for their acreage, usually by donating those rights to a nonprofit land trust, get a charitable deduction in return. When conservation easements are used as intended, both the public and the owner of the property benefit. A piece of pristine land is preserved, sometimes as a park that the public can use, and the donor gets a tax break.
The syndicated versions are different. Instead of seeking to protect a bucolic reserve for wildlife or humans, profit-seeking intermediaries have turned the likes of abandoned golf…
