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designated syndicated conservation easement arrangements Published on February 18, 2020 Edit article View stats call firstStatus is online call first Speaker, author expert witness at VEBA LLC 188 articles The Internal Revenue Service today urged taxpayers involved in designated syndicated conservation easement arrangements to consult with their tax advisors following a recent U.S. Tax Court decision and agency plans to continue enforcement efforts in this area.
In late 2016, the Internal Revenue Service designated certain syndicated conservation easement arrangements as "listed transactions" in Notice 2017-10 (PDF).
On Dec. 13, 2019, the U.S. Tax Court entered its first decision on a syndicated conservation easement transaction. In TOT Property Holdings, LLC v. Commissioner, Docket No. 005600-17, the Tax Court sustained in its entirety the IRS's determination that all tax benefits from a syndicated conservation easement transaction should be denied and that the 40% gross valuation misstatement and negligence penalties applied. The Tax Court found that the transaction failed the legal requirements applicable to donations of land easements and, in imposing the gross valuation misstatement penalty, found that the actual value of the easement donation was less than 10 percent of what was originally reported on the tax return.
"In denying the deductions and upholding the 40% gross valuation misstatement penalty, the Tax Court confirmed that aggressive syndicated easement transactions simply will not survive scrutiny," said IRS Commissioner Chuck Rettig. "We will not stop in our coordinated pursuit of these abusive transactions while seeking the imposition of all available civil penalties and, when appropriate, various criminal options for those involved."
"If you engaged in any questionable syndicated conservation easement transaction, you should immediately consult an independent, competent tax advisor to consider your best available options," Rettig added.
Tax Court trials in four other syndicated easement cases were conducted earlier this year and more than 50 cases are pending. In other recent cases, the Tax Court has rejected arguments that various regulations taxpayers failed to comply with are invalid, essentially negating one of these taxpayers' main defenses.
"We are prepared to take each of these and all other cases being developed by the IRS to trial, although the substance of most cases can be resolved without trial because the transactions do not meet the basic requirements to claim the charitable contribution deduction," said IRS Chief Counsel Mike Desmond. "We encourage taxpayers and their advisors to see the writing on the wall and take immediate steps to resolve these matters."
Report this Published by call firstStatus is online call first Speaker, author expert witness at VEBA LLC Published • now
AMANDA J. ANDREWS ASSOCIATE COUNSEL, LEGAL DIVISION ARKANSAS INSURANCE DEPARTMENT "Mr. Wallach, Thank you for providing me with this information. I will review it next week and, I’m sure, be in touch. I very much appreciate your help."
designated syndicated conservation easement arrangements
ReplyDeletePublished on February 18, 2020
Edit article
View stats
call firstStatus is online
call first
Speaker, author expert witness at VEBA LLC
188 articles
The Internal Revenue Service today urged taxpayers involved in designated syndicated conservation easement arrangements to consult with their tax advisors following a recent U.S. Tax Court decision and agency plans to continue enforcement efforts in this area.
In late 2016, the Internal Revenue Service designated certain syndicated conservation easement arrangements as "listed transactions" in Notice 2017-10 (PDF).
On Dec. 13, 2019, the U.S. Tax Court entered its first decision on a syndicated conservation easement transaction. In TOT Property Holdings, LLC v. Commissioner, Docket No. 005600-17, the Tax Court sustained in its entirety the IRS's determination that all tax benefits from a syndicated conservation easement transaction should be denied and that the 40% gross valuation misstatement and negligence penalties applied. The Tax Court found that the transaction failed the legal requirements applicable to donations of land easements and, in imposing the gross valuation misstatement penalty, found that the actual value of the easement donation was less than 10 percent of what was originally reported on the tax return.
"In denying the deductions and upholding the 40% gross valuation misstatement penalty, the Tax Court confirmed that aggressive syndicated easement transactions simply will not survive scrutiny," said IRS Commissioner Chuck Rettig. "We will not stop in our coordinated pursuit of these abusive transactions while seeking the imposition of all available civil penalties and, when appropriate, various criminal options for those involved."
"If you engaged in any questionable syndicated conservation easement transaction, you should immediately consult an independent, competent tax advisor to consider your best available options," Rettig added.
Tax Court trials in four other syndicated easement cases were conducted earlier this year and more than 50 cases are pending. In other recent cases, the Tax Court has rejected arguments that various regulations taxpayers failed to comply with are invalid, essentially negating one of these taxpayers' main defenses.
"We are prepared to take each of these and all other cases being developed by the IRS to trial, although the substance of most cases can be resolved without trial because the transactions do not meet the basic requirements to claim the charitable contribution deduction," said IRS Chief Counsel Mike Desmond. "We encourage taxpayers and their advisors to see the writing on the wall and take immediate steps to resolve these matters."
Report this
Published by
call firstStatus is online
call first
Speaker, author expert witness at VEBA LLC
Published • now
AMANDA J. ANDREWS ASSOCIATE COUNSEL, LEGAL DIVISION ARKANSAS INSURANCE DEPARTMENT
ReplyDelete"Mr. Wallach, Thank you for providing me with this information. I will review it next week and, I’m sure, be in touch. I very much appreciate your help."