A taxpayer is generally allowed a deduction for a charitable contribution of a conservation easement over undeveloped land or a historic building if the easement protects the property in perpetuity and meets certain other requirements.

However, in recent years, the IRS has been extremely aggressive in challenging such deductions.  Rather than focusing on the value of an easement, which is a highly fact-specific inquiry, in many cases the IRS has sought to disallow charitable deductions as a result of technical flaws with conservation easement deeds.

For a donation of a conservation easement to be eligible for a charitable deduction, the Internal Revenue Code requires that the easement be "a restriction (granted in perpetuity)" on the use of the property and that the easement's conservation purpose be "protected in perpetuity."  Treasury regulations interpreting these requirements, which were finalized in 1986, provide that if subsequent changes in the conditions surrounding the property "make impossible or impractical the continued use of the property for conservation purposes," then the perpetuity requirement is still satisfied if the easement is extinguished by a judicial proceeding and the donee's share of any resulting proceeds is used in a manner consistent with the easement's conservation purposes.