Schmidt v. Commissioner
About This Legal Opinion
This opinion wades into the weeds of the valuation analysis. The Tax Court found fault with aspects of the taxpayer appraiser's methodology and conclusions, the appraiser had extensive experience with conservation easements helped the taxpayer avoid any appraisal penalties.
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This resource is a Land Trust Alliance member benefit for the staff, board and volunteers of land trust and affiliate member organizations, and Alliance donors at the Protector level.
Evans v. Commissioner
The taxpayer failed to meet the burden of proof on valuation so the IRS' zero valuation was sustained. The Court declined to assess the accuracy-related penalty, finding that the original appraisal was qualified, that taxpayer had reasonable cause and acted in good faith reliance on the appraiser.
Hiring an Appraiser
One of the first steps in securing a sound appraisal is for the landowner to hire a knowledgeable and competent appraiser. In addition to securing the services of a good appraiser, it is important that the land trust stay in close contact with him or her throughout the valuation process.
Champions Retreat Golf Founders, LLC v. Commissioner
The Tax Court largely upheld the conservation easement donor’s valuation claim, despite flaws with the appraisal. The court also denied the taxpayer’s motion for litigation costs, finding that the IRS’s litigation position was “substantially justified” and the taxpayer was not a “prevailing party.”
Palmer Ranch Holdings, LTD v. Commissioner I
Tax Court largely agreed with taxpayer's appraiser but did reduce the value somewhat and found the reasonable cause exception avoided the penalty.
Foster v. Commissioner of IRS
The Tax Court held that the appraisal was unsupported by any quantitative analysis of the factors leading to the reduction in value, and therefore the taxpayer did not meet his burden of showing the easement's value.
Valuation of Conservation Easements
Valuation of Conservation Easements is an advanced course designed for the appraiser who understands the methodology in the approaches to value and is ready to embark on understanding the intricacies involved in one of the most misunderstood and difficult types of appraisals.
Emanouil v. Commissioner
The Tax Court found for the taxpayer on all disputes with the IRS in this quid pro quo and substantial compliance donation case, including valuation and rejected all penalties. Despite several missing appraisal requirements, the appraisals provided enough information to evaluate the contributions.
Rock Spring, LLC v. Commissioner
The Tax Court denied summary judgment, agreeing with the taxpayer that both compliance with the regulation for a “qualified appraiser” and supplying “a description of the property in sufficient detail” required further factual development.
Whitehouse Hotel Limited Partnership, Qhr Holdings II
Fifth Circuit upheld the Tax Court in finding that the IRS appraiser was qualified and that the IRS appraiser's failure to comply with USPAP did not render his testimony and report inadmissible but reversed on valuation and penalties.
The Art of Appraisals
The art of appraising conservation land can be complicated, and a land trust must make sure the appraiser is qualified. This document provides an overview of what is involved in an appraisal, how to find a qualified appraiser and pertinent questions to ask an appraiser.