Information Regarding IRS Audits of Conservation Easements

Note: The following discussion is provided for informational purposes only and is not intended to serve as legal or tax advice. For specific information about IRS or Colorado Department of Revenue Audits or other tax information, consult your attorney or tax advisor.

Conservation easements are a critical tool that have been used to protect over 1.2 million acres of working farms and ranches, river corridors, wildlife habitat and scenic open lands that support our economy and define our communities and the special quality of life that we enjoy in Colorado.

The IRS is currently conducting an audit of conservation easements across the country. There is no doubt that tax abuses must be identified and stopped. However, we are concerned that unless the process is focused on those who are practicing tax fraud or abuse, the IRS may inadvertently damage the integrity of hundreds of legitimate conservation efforts across Colorado.

• Senator Allard questions the IRS on Colorado audits. Senator Wayne Allard questioned the IRS on Wednesday April 16, 2008 during the Appropriations Sub-committee on Financial Services and General Government. You can listen to the audio of Sen. Allard's opening remarks and the IRS response by downloading the files below. You will need Real Player or another media player that is capable of playing Internet radio files. If you would prefer to listen to the Internet broadcast please use the link provided by the Senate Appropriations website (note: Internet radio capable media player is necessary). The opening remark by Sen. Allard starts at 5:50 ending at 8:40, the IRS response is at 27:15 ending at 32:40.
  
• Senators Taking on IRS About Audits of Conservation Easements in Colorado
• Useful Information to Understand the IRS and Colorado Audit Process
• Stories of Lands Preserved With Conservation Easements
• Conservation Easement Law Cases Read about the latest conservation easement law cases as well as the IRS’s response to the Land Trust Alliance’s inquiry about habitat conservation as a conservation purpose.
• Internal Revenue Code Section 170(h)
• Treasury Regulations Section 1.170A-14
• IRS Notice 2004-28, July 12, 2004 This is a 2004 notice from the IRS for the purpose of advising participants in conservation easement transactions that “in appropriate cases, the Service intends to disallow [charitable contribution] deductions and may impose penalties and excise taxes.” This notice also explains Contributions of Conservation Easements and Purchases of Real Property from Charitable Organizations under Section 170 of the Internal Revenue Code.
  

Please check back often for updates and additions to this information.

Legal Professionals This list of conservation and tax law professionals is designed to assist landowners, local governments, land trusts and interested parties in locating the individuals and organizations that can provide these needed services. Indiviuals listed in this list are included on the bsis of their stated areas of competence and expertiese and other information provided by them. Inclusion does not imply confirmation of the information nor any endorsement by the Colorado Coalition of Land Trusts.