The IRS has proposed regulations that would strengthen its ability to question aggressive land-rights tax deals, requiring participants and promoters of so-called syndicated conservation easement transactions to disclose them to the government, with steep penalties for omissions.
The move would help the IRS identify and audit the easement deals, which senior IRS officials say are tax shelters that deprive the government of billions of dollars in revenue.
In a conservation easement, landowners make a binding, permanent pledge to prevent development on a piece of property, donating the easement to a nonprofit entity, typically a land trust.
Treasury and the IRS intend to finalize these proposed regulations, after due consideration of public comments, in 2023 and propose regulations identifying additional listed transactions soon. Read more.