Internal Revenue Service building in Washington, D.C, on January 12, 2022. Photo: Diego M. Radzinschi/ALM
On Oct. 7, the IRS finalized regulations identifying certain syndicated conservation easement (SCE) transactions as listed transactions, a type of transaction with additional reporting requirements. In these transactions, investors typically acquire an interest in a partnership that owns land and then claim a portion of charitable contribution deductions for the appraised values of easements conveyed by the partnership to preserve the land’s conservation attributes.
The IRS has sought to restrict taxpayers’ use of SCE transactions and has included such transactions in its annual list of “Dirty Dozen” tax schemes in recent years. Previously, the IRS issued Notice 2017-10 identifying certain SCE transactions as listed transactions, but this notice was later struck down by the courts for its failure to follow the Administrative Procedure Act’s notice and comment procedures.
