IRS Tax Provision
The IRS Has Seen Abuses of a Tax Provision that compromises the policy that Congress promoted. We have seen taxpayers, that are encouraged by promoters, take inappropriately large deductions for conservation easements. IRS Tax Provision
Taxpayers have sometimes used or developed these properties in a manner inconsistent with section 501(c)(3). In other cases, the charity has allowed property owners to modify the easement or develop the land in a manner inconsistent with the easement’s restrictions.
Another problem arises in connection with historic conservation easements, particularly façade easements. For example, taxpayers are taking improperly large deductions. They agree not to modify the façade of their historic house and they give an easement to this effect to a charity.
However, if the façade was already subject to restrictions under local zoning ordinances, the taxpayers may, in fact, be giving up nothing, or very little. A taxpayer cannot give up a right that he or she does not have.