Land Trust Alliance Applauds Introduction of the Charitable Conservation Easement Program Integrity Act

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‘We must stop bad actors from getting in the way of good conservation’

We must stop bad actors from getting in the way of good conservation.

The Land Trust Alliance, a national land conservation organization working to save the places people need and love by strengthening land conservation across America, today endorsed on behalf of its 1,000 member land trusts the introduction of the Charitable Conservation Easement Program Integrity Act in the House of Representatives.

U.S. Rep. Mike Kelly of Pennsylvania, a Republican, and Rep. Mike Thompson of California, a Democrat, introduced the bill as companion legislation to S. 170, sponsored by Sen. Steve Daines of Montana, a Republican, and Sen. Debbie Stabenow of Michigan, a Democrat. Both bills, which are identical, make clear that conservation easement donations, like other charitable donations, are not intended to be profit opportunities.

The bills eliminate the ability to profit from the donation of a conservation easement on land held for a short period of time. Such legislation is timely given that the Internal Revenue Service recently included such transactions on its “dirty dozen” list of tax scams to avoid.

“While the vast majority of conservation easement donations are legitimate transactions made with true charitable intent, there also are abusive deals that must be stopped,” said Andrew Bowman, the Alliance’s president. “I commend Rep. Kelly and Rep. Thompson for their leadership on this issue and for building momentum behind this necessary legislation. We must stop bad actors from getting in the way of good conservation.”

Concurrent with its endorsement of the House bill, the Alliance is delivering to Capitol Hill a letter from prominent conservation organizations in support of the Charitable Conservation Easement Program Integrity Act. Addressed to the bill’s sponsors, the letter notes the legislation would halt abuse while ensuring “tax incentives for land conservation remain available for genuine philanthropists whose priority is conserving the lands we need and love.”

In late 2016, the U.S. Department of the Treasury and the IRS flagged a narrow subset of conservation easement transactions because bad actors had developed a way for investors to make short-term profits off of donations of conservation easements. IRS data show that investors claimed, on average, deductions valued at nine times the amount of their original investment. Approximately $20 billion in unwarranted tax deductions was claimed from 2010 to 2016, according to the IRS. In 2016 alone, $6 billion in charitable deductions was claimed by participants from just 248 transactions.

Even though promoters of and participants in these transactions must now report their activities to the IRS or face fines, the problem persists. Late last year, the U.S. Department of Justice filed a civil complaint against promoters of an allegedly abusive conservation easement syndication tax scheme. According to the complaint, the 96 transactions at issue resulted in over $2 billion in claimed federal tax deductions.

The Alliance has worked for years to counter this abuse, pressing the IRS to shut down these transactions and taking a number of actions to help its member land trusts identify and avoid these deals, all while ensuring honest philanthropy continues to be rewarded. But because these deals continue to be promoted, Reps. Kelly and Thompson along with Sens. Daines and Stabenow are championing the Charitable Conservation Easement Program Integrity Act.

Multiple land conservation organizations representing millions of supporters have endorsed the Charitable Conservation Easement Program Integrity Act, including Ducks Unlimited, The Trust for Public Land, The Nature Conservancy, The Conservation Fund and Pheasants Forever, among others. Additionally, the Appraisal Institute, the nation’s largest professional association of real estate appraisers, and the American Society of Farm Managers and Rural Appraisers support the bill.

For more information, visit http://www.landtrustalliance.org.

About the Land Trust Alliance

Founded in 1982, the Land Trust Alliance is a national land conservation organization that works to save the places people need and love by strengthening land conservation across America. The Alliance represents 1,000 member land trusts supported by more than 200,000 volunteers and 4.6 million members nationwide. The Alliance is based in Washington, D.C., and operates several regional offices. More information about the Alliance is available at http://www.landtrustalliance.org.

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Joshua Lynsen
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