The Task Force was Chaired by W. William Weeks and included Turney Berry, Jonathan Blattmachr, Jason Havens, Nancy McLaughlin, James Slaton, Steve Swartz, and Philip Tabas. Commissioned in late 2015, the effort aimed to contribute to the clarification and improvement of the federal tax law of conservation easements. Specific objectives were to clarify the rights and responsibilities of conservation easement holders and donors, reduce audits and litigation over conservation easements, and secure better protection for the natural and cultural values that conservation easements are intended to preserve.
The Report provides information about the history, purposes and scope of conservation easement use in the United States, and reviews certain issues raised by IRS and treasury officials. The principal conclusions of the Report can be categorized within fives general areas.
First, the Task Force Report recommends that the Department of the Treasury develop and publish safe harbor language covering a number of provisions that are likely to appear in most conservation easements (and particularly those intended to qualify for deduction.) The Task Force suggests, in addition, that existing holders and donors of conservation easement be given a reasonable time to bring their documents into conformity with the safe harbor language. The appendix to the Task Force Report includes sample provisions.
Second, the Task Force recommends that Treasury provide guidance and rules to facilitate appropriate amendments of conservation easements and discourage improper amendments. The Report sets forth principles to guide that effort, suggests that a series of examples that would clarify the guidance be published and provides a number of such examples. The Report recommends that certain kinds of minor or ministerial amendments be recognized as safe enough to proceed without review. For amendments that ought to be independently reviewed, the Report recognizes that judicial review is available and sometimes desirable, but concludes that there may be less formal, less expensive, and comparably reliable ways to review them. The Report outlines a number of possibilities including IRS sanctioned review panels and notice to the relevant state charity regulating body.
Third, the Task Force recommends improvements to a number of forms now used to report on the nature and administration of conservation easements, including Forms 990, 8282, and 8283.
Fourth, the Task Force recommends clarification of the regulations that govern and prohibit inconsistent use of the land subject to easement restriction. These provisions are a well–intended attempt to be sure that easement provisions intended to protect one valuable conservation purpose do not unnecessarily damage another, but as written they may create unintended difficulties.
Fifth the Task Force recommends a number of measures to help improve the reliability of conservation easement appraisals for both donors and the IRS. Possibilities include appraisal panels and the development of a Qualified Easement Qualified Appraisal Form that could guide appraisers and reviewers through a consistent and complete step by step process for deriving values.
In addition, the Task Force acknowledged the concerns of the IRS and the land trust community about the inflated easement appraisals that have driven recent tax shelter activity. So-called conservation easement “syndications” offer investors pass-through deductions that are often larger than the investment made in certain business entities that donate conservation easements. While seeking some clarification in definitions, the Task Force generally expressed support for the approach taken by the IRS in Notices 2017-10 and 2017-29, an approach which has, since the completion of the Task Force Report manuscript, been reflected in legislation.