Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Ore.) released a report on their bipartisan investigation into syndicated conservation easement transactions (report summarized here). These abusive transactions are created by promoters who sell interests in land to taxpayers seeking large tax deductions. Upon investing in these schemes, the taxpayers grant conservation easements using inflated appraisals and then share the inflated tax deductions among the investors. The abusive nature of these transactions stems from the inflated appraised values of the conservation easements and the effective purchase by investors of tax deductions, both concepts negating any charitable intent by the donors of the conservation easements. The report states that the IRS estimates that between 2010 and 2017, syndicated conservation easement transactions have generated $26.8 billion in charitable contribution deductions for the investors.
The Land Trust Alliance and other conservation organizations have loudly protested these abusive tax shelters and are actively lobbying for the passage of the bipartisan Charitable Conservation Easement Program Integrity Act, a bill now ready for passage in the House (H.R. 1992) and the Senate (S. 170). The bill would effectively eliminate the abusive tax shelters while allowing legitimate conservation easement donations based on charitable intent to continue.
A copy of the full text of the report can be found here, and the exhibits to the report can be found here.