Conservation Easement Attorney
Cal Bomar is a former IRS Chief Counsel Attorney, who specializes in IRS and state tax cases involving syndicated conservation easements. Our team includes some of the best-known tax lawyers in the U.S. Whereas most law firms who handle these cases represent promoters, our firm only represents investors in easement deals. We are focused on getting investors the most favorable relief. We understand how stressful an IRS tax case can be and know that conservation easement investors find themselves in this situation through no fault of their own. It is important to address the problem so that you can get a positive result and put it behind you.
Here’s What You’ll Get From The Bomar Law Firm:
1. A free consultation and strategy session with a former IRS attorney.
2. The vast experience and resources of our best tax lawyers in Atlanta.
3. Attorneys that you can reach and receive an update from the same day.
4. Attorneys and staff who care about you and your case, and who will fight tirelessly to get you to the most favorable result.
Why Is The IRS Attacking Syndicated Conservation Easement Deals?
To create a syndicated conservation easement, a promoter brings together a group of investors, places them into a passthrough entity (like an LLC that is a partnership for tax purposes) that has purchased land, and then places a conservation easement on that land restricting the private use of the property in order to protect its conservation value. The partnership takes a charitable deduction for the reduction in the value of the land and passes that tax deduction to the investors on Form K-1.
Conservation easements are legal when set up correctly and using the actual value of the property. In fact, easements were often marketed to investors as a way to help the environment in a way that was legal and even encouraged by Congress. Most promoters told investors that they used very conservative appraisals, using two appraisers and taking the lower of the two appraisals. Investors were often advised by an attorney and CPA that the transaction was legal. In addition to the appraisals, many were also shown opinion letters from law firms that the transactions were done legally.
IRS asserts that most syndicated conservation easement transactions are abusive. IRS points to examples of promoters who appraised the land at extreme multiples over its recent purchase price. IRS also seeks to disallow deductions using technical defects, such as asserting that the deed of conservation did not meet the requirements because it did not convey the property in “perpetuity” (forever). The IRS has indicated that it may also challenge the transactions based on the partnership anti-abuse rule, economic substance and other rules or doctrines. The IRS asserts that the easements have resulted in the Treasury losing over twenty billion dollars to fake charitable deductions since 2010.
What Will 2023 Hold For Conservation Easement Cases?
As of January 2023, the IRS and DOJ have obtained more than a million pages of documents in their investigations of syndicated conservation easement transactions. IRS intends to audit all conservation easement deals that are not beyond the statute of limitations on assessment.
In criminal investigations, the DOJ has focused heavily on promoters who took the most extreme valuation multiples and those who falsified documents (such as backdating). Most promoters of syndicated conservation easements have stopped doing new deals, but both DOJ and IRS appear to be focusing additional resources on those that continue.
After several attempts, Congress passed a law that will disallow future syndicated conservation easement deals that are more than 2 1/2 times the Taxpayer’s basis.
Many of these cases are now going to trial, and this will continue throughout 2023. Most of these cases involve a very large imposition of tax and penalties at the partner level via computational adjustments as the cases conclude at the partnership level. Obtaining relief at the partner level will be vital as the cases progress – just as it is already needed in those that have already concluded. Deadlines and statutes of limitation will apply to relief available to investors, so it is important to consult with an attorney as soon as possible.
How Can You Contact Us To Obtain Relief?
To speak with a conservation easement tax attorney for a detailed analysis of how to get a positive result in your case, contact Bomar Law Firm.