Land Conservation Tax Break Under Increasing Scrutiny
Talking Tax14 Heinä 2022

Land Conservation Tax Break Under Increasing Scrutiny

Tax-advantaged land deals known as syndicated conservation easements are under increasingly heavy scrutiny from the IRS and Congress. The transactions involve a tax break under tax code Section 170(h) that is designed to encourage property owners to give away the development rights for land or buildings for conservation purposes. Syndicated deals—which involve multiple parties who buy into a property, often based on promises of super-sized deductions worth several times more than their investment—are designated as tax schemes on the IRS's infamous Dirty Dozen list. The IRS has been fighting some of these deals in court, while legislation targeting the practice has progressed on Capitol Hill, albeit slowly. On the latest episode of Talking Tax, Tabetha Peavey, an attorney adviser for the Tax Law Center at New York University Law, and Rep. Mike Thompson (D-Calif.), who has introduced legislation targeting the deals, discuss syndicated easements. Peavey explains how the transactions work and what the IRS has done to stop what it considers to be abusive behavior. Then Thompson offers his thoughts on whether this is the year that a long-simmering proposal to restrict the deals makes it through Congress. Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

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