In December 2022, Congress passed the Charitable Conservation Easement Program Integrity Act. As part of that legislation, conservation easement donors have been afforded a one-time, 90-day window in which to correct certain specific conservation easement language pertaining to boundary line adjustments and extinguishment proceeds that the IRS has deemed problematic, and which the IRS might use for grounds to deny a federal tax deduction.
According to the notice, conservation easement donors are not required to correct their easement language, but fixing the problematic language might protect federal tax deductions from an audit on the basis of the problematic language. Please note that correcting the problematic language does not protect a deduction from audit or from being denied by the IRS on other grounds.
Five Valleys Land Trust cannot provide legal or tax advice and we have not analyzed the language in your specific conservation easement or your tax situation. You are encouraged to review the IRS notice and consult with your legal counsel or tax professional to answer the following questions:
If, after consulting with your legal counsel or tax professional, you are interested in completing a correction, please contact us as soon as feasible because we will likely not be able to complete requests made close to the July 24, 2023 deadline.
Any such "safe harbor" corrections are subject to approval by Five Valleys Land Trust and we cannot guarantee that you will be able to amend your easement, or that an amendment will be completed by the IRS’ July 24, 2023 deadline. You may incur costs like title work, legal expenses, and recording fees if you seek to amend your easement.
Header photo of the Grass Valley by Paul Lebel