Evaluating IRS Conservation Settlement Offers

See here for Sheppard's discussion of earlier settlement offers.

Hale Sheppard has an interesting article out in Tax Notes in which he updates readers on the Service's most recent settlement initiative.  He compares that initiative to prior settlement offers.  Sheppard discusses the history of conservation easements from  the pre-IRC 170(h) days, through the wild and crazy days of abusive valuations, the Service's "listed transaction" stance and its long-running counter offensive, all the way up to the latest settlement offer.  Here is the introduction to Evaluating Three Conservation Easement Settlement Offers:

It has been nearly a decade since the IRS started conducting widescale audits of what it now labels syndicated conservation easement transactions (SCETs). When that will end is far from clear, but what is apparent is that the IRS is eager to conclude as many cases as possible, and fast. Why? The IRS might be concerned about losing a major case on valuation issues before the Tax Court or Court of Appeals, which could unleash numerous future taxpayer victories. Another possibility is that the IRS wants to clear its inventory of existing SCET cases, believing they soon might not be problematic because of a new law limiting the size of charitable deductions.

Another motive might be that battling sophisticated taxpayers in high-dollar, complex, document-intensive cases is a drain on the IRS’s resources. The true reasons for the IRS’s desire to resolve SCET cases now is not especially important; what matters is understanding the relevant settlement programs and their nuances. This article compares three different IRS programs, identifying several open questions.

darryll k. jones