Conservation Easements Investments Tax Shelters: Red Flag with the IRS?

Conservation Easements Investments:  Red Flag with the IRS? Updated May 10, 2021

The White Law Group is investigating potential securities fraud claims involving the liability that sale agents and broker-dealers may have for improperly recommending conservation easements (tax shelter land deals) to unsuspecting investors.

Syndicated conservation easements are private placements that promise tax deductions worth four to four-and-a-half times a person’s investment. The IRS has reportedly been investigating these transactions over the past three years with questions about the accurate appraisals and valuations of properties. Some syndicated conservation easement deals are offering investors charitable contribution deductions on taxes for large amounts.

That means an investor could hypothetically turn a $100,000 investment into $400,000 or more in tax deductions.

On March 27^th, 2019 the Senate Finance Committee reportedly launched an investigation into conservation easements after the Brookings Institution reportedly found that conservation easements cost the federal government more than $3 billion dollars in 2014 alone with that amount expected to increase each subsequent year.

Apparently the Senate Finance Committee believes that groups of taxpayers are using syndicated conservation easements to reap tax benefits greater than their initial investments, according to a press announcement.

While there are very legitimate purposes for the conservation easement provisions of the tax code, the committee reportedly believes that “these tax provisions are being abused, and it will inform what else ought to be done to fix the problem.”

There may be a Tax Audit in your Future.

The IRS has reportedly seen abuses of this tax provision and it is currently investigating taxpayers who are using questionable appraisals, and taking inappropriately large deductions for easements. Investors who received charitable contribution deductions of more than 2.5 times their investment could possibly be audited, and potentially even hit with a revised tax bill.

These syndicated conservation easements may be sold through both independent broker-dealers and directly by attorneys and CPAs who create the syndications and tend to have high commissions and fees.

Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Recommendations should be appropriate in light of the investor’s age, risk tolerance, net worth, and investment experience.

Broker dealers that fail to adequately disclose risks or make unsuitable investment recommendations can be held liable for investment losses in a FINRA arbitration claim.

The White Law Group is investigating potential claims against sales agents that sold the following conservation easement investment offerings, among others:

Free Consultation

If you have invested in a conservation easement (tax shelter land deal) and would like to speak to a securities attorney about the potential to recover your investment losses, please call The White Law Group at 1-888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. To learn more about The White Law Group visit www.whitesecuritieslaw.com.