A federal appeals court decision allowing owners of a private golf club to claim a $10 million tax deduction for preserving adjacent land from development never mentions the coronavirus pandemic. But the details over whether a conservation easement at the Champions Retreat golf community near Augusta sufficiently protected "a relatively natural habitat of fish, wildlife, or plants" read like a legal walk in the woods that could, temporarily, stave off a case of quarantine-induced stir-craziness.

"One expert observed 61 species of birds on the property, including 26 that are listed as a priority by one or more conservation organizations," wrote Judge Robert Hinkle, a district court judge from Florida on temporary assignment to the U.S. Court of Appeals for the Eleventh Circuit. "These included the eastern whip-poor-will, brown-headed nuthatch, red-headed woodpecker, and prothonotary warbler. The expert saw a wood duck with fledglings, suggesting onsite breeding."

An expert for the Internal Revenue Service "saw a wood stork—a federally listed endangered species—though he opined it was just passing through," Hinkle added.

Joined by Eleventh Circuit Judge Charles Wilson and, in part, by Judge Britt Grant, Hinkle explained that the U.S. Tax Court was wrong to deny the tax deduction to Champions Retreat's owners.

The underlying decision, by Judge Cary Douglas Pugh, held that Champions Retreat "presented evidence of only one rare, endangered, or threatened species with a habitat on the easement area–denseflower knotweed—and it inhabits just a small fraction of the easement area."

"To get around these facts, Champions Retreat would have us ignore the specific wording of the regulation and adopt a standard that includes any species of current or future conservation concern."

Champions Retreat, represented by Fox Rothschild in Atlanta, appealed to the Eleventh Circuit and won a decision from the full panel that it was entitled to a deduction.

Grant dissented only on one part, writing, "I must part ways with the majority's decision to reach an issue not argued below and with its separate conclusion that the easement is necessarily a "relatively natural habitat."

Grant noted that the knotweed could suffer from exposure to chemicals that treat the golf course.

But no matter how many animals live on the Champions easement, she added, "the reality remains the same: with the chemicals, imported grasses, large fans, artificial drainage, and water pumping, it is not at all clear that the easement amounts to a 'relatively natural habitat.' I do not mean to say that a golf course could never qualify; it's simply not clear that this one does."

A comment from the IRS did not arrive by the time this article was posted.

Vivian Hoard, Fox Rothchild, Atlanta (Courtesy photo)

Hoard, who recently switched firms from Taylor English Duma to Fox Rothschild, said the decision "helps establish the law on 'relatively natural habitats' and 'open spaces'" for which landowners can receive tax deductions if they agree not to develop the areas.

She said the decision held that the IRS was too strict in arguing that deductions could be granted only for conservation of habitats that protect extremely endangered species, such as those where fewer than 20 are still alive.

"Congress has told people to do this," she said of the rule allowing deductions for people who set aside land not to be developed. But problems occur when the IRS change the rules.