11th Circuit Rules That IRS Conservation Easement Listing Notice Is Invalid

The U.S. Court of Appeals for the Eleventh Circuit affirmed a federal district court decision that IRS Notice 2017-10 is invalid because the IRS failed to comply with the Administrative Procedure Act's public notice and comment requirements. The Notice identified certain syndicated conservation easement transactions as tax avoidance "listed transactions" and so subject to disclosure and other requirements. The case is Green Rock LLC v. IRS (No. 23-11041, June 4, 2024). The 11th Circuit joins the 6th Circuit (Mann Construction, Inc. v. United States, 27 F.4th 1138 (2022)) and the Tax Court (Green Valley Investors, LLC v. Comm'r, 159 T.C. No. 5 (2022)) in reaching this conclusion.

Reacting to the earlier decisions, in Announcement 2022-38 Treasury and the IRS stated they had published proposed regulations to address the asserted APA deficiencies in the previous Notice. While the announcement said Treasury and the IRS intended to finalize the proposed regulations in 2023, to date they have not yet done so.

Lloyd Mayer