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Land Trust and Taxpayer Win in IRS Easement Challenge

Posted 2009 Reviewed July 6, 2022
Leslie Ratley-Beach
About This PDF

The US Tax Court recently decided a case in which the IRS challenged a North American Land Trust conservation easement on 141 acres of Alabama coastal land, part of which included a golf course. After trial and briefing, the IRS dropped its challenge of the easement’s conservation values and focused on valuation. The easement includes significant habitat for endangered species, is a critical migratory bird flyway and buffers a federal wildlife refuge. The Tax Court upheld the easement, upheld the deduction for a stewardship endowment, and only slightly reduced the value of the donation from what the taxpayer had claimed. The following is a more detailed examination of the issues in the case.