Conservation Easements Being Audited

In the majority of preservation easement audits, the IRS has used a professional appraiser who is an IRS employee rather than relying on an independent outside easement contractor.

IRS audit examinations, now accelerated and continued to usually disallow easement deductions in full.

The “Dirty Dozen” listing, the revised IRS donation forms for non-cash contributions and Form 990 changes (which newly flag easement donations), the increased examinations of done organizations and some officers, the high level of audit coverage without settlements, and Appeals Officers sustaining the audit results, have added to the perception that the IRS is overreaching on this issue.