Close-up of Conservation easement with pen
In Green, or Greed? A Fresh Perspective on the Valuation of Conservation Easements, three Boston University Law professors, Alan Feld, Theodore Sims and Jacob Nielsen give us a fresh perspective on one of the IRS Dirty Dozen. That would be Abusive Syndicated Conservation Easement, which the IRS Dirty Dozen scam list describes like this:
In syndicated conservation easements, promoters take a provision of the tax law allowing for conservation easements and twist it by using inflated appraisals of undeveloped land (or, for a few specialized ones, the facades of historic buildings), and by using partnership arrangements devoid of a legitimate business purpose. These abusive arrangements do nothing more than game the tax system with grossly inflated tax deductions and generate high fees for promoters.
SCEs Are For HENRY
The IRS closes its description of the abusive SCEs with a statement by Commissioner Rettig:
It is not fair that wage-earners pay their fair share year after year but high-net-worth individuals can, under the guise of a real estate investment, avoid millions of dollars in tax through overvalued conservation easement contributions
My evidence is anecdotal, but I actually believe that SCEs were a way of bringing the tax benefits of conservation easements to HENRY. HENRY is an acronym for High Earner Not Rich Yet. (I wish I could rework the acronym to make if gender neutral, but I will…
