Guest Post: Timely and Essential

Today I’m sharing with you a very current Land Trust Alliance article, written by Andrew Bowman, on new conservation easement legislation, which is important for the continued integrity of legitimate land conservation easement protection.

On behalf of the Land Trust Alliance and our 1,000 members, I’m pleased to applaud the U.S. Senate’s early reintroduction of the Charitable Conservation Easement Program Integrity Act.

Sponsored by U.S. Sen. Steve Daines of Montana, a Republican, and Sen. Debbie Stabenow of Michigan, a Democrat, the Charitable Conservation Easement Program Integrity Act (S. 170 (link is external)) would eliminate the ability of partnership investors to profit from the donation of a conservation easement on land held for a short time. Like legislation first introduced during the previous Congress, this bill’s language makes clear that conservation easement donations, like other charitable donations, are not intended to be profit opportunities.

This legislation is timely and essential. Sen. Daines and Sen. Stabenow are working together — with the support of 1,000 nonprofit land trusts across our nation — in the best tradition of sensible bipartisan cooperation to get this done. Their leadership on this issue sends a clear message that conservation easements are not to be used as tax shelters. I look forward to this bill’s passage.

As you know, the U.S. Department of the Treasury and the IRS flagged in late 2016 a narrow subset of conservation easement transactions because bad actors had developed a way for investors to profit off such charitable donations. IRS data show that investors claimed, on average, deductions valued at nine times the amount of their original investment. Approximately $20 billion in tax deductions have been claimed from 2010 to 2016, according to the IRS. In 2016 alone, $6 billion in unwarranted charitable deductions was claimed by participants from just 248 transactions.

Even though promoters of and participants in these transactions must now report their activities to the IRS or face fines, the problem persists. Just last month, the U.S. Department of Justice filed a civil complaint against promoters of an allegedly abusive conservation easement syndication tax scheme. According to the complaint, the 96 transactions at issue resulted in over $2 billion in claimed federal tax deductions.

The Alliance has worked for years to counter this abuse, pressing the IRS to shut down these transactions and taking a number of actions to help its member land trusts identify and avoid these deals, all while ensuring honest philanthropy continues to be rewarded. But because these deals continue to be promoted, we continue our campaign.

Ultimately, land conservation incentives should inspire charitable giving, not wrongful profiteering.

Originally published on the LTA blog.