The Internal Revenue Service (IRS) significantly raises enforcement action on syndicated conservation easement in the United States. According to the details, a considerable increase has been applied in the enforcement actions for syndicated conservation easement transactions which is a main concern compliance area for the Internal Revenue Service in USA.

The Department of Justice filed a complaint in December 2018 for stopping numerous individuals as well as an entity from organizing, promoting or selling of allegedly abusive syndicated conservation easement transactions in the United States. The IRS is still working in collaboration with the Department of Justice for the same purpose. On the same context, all taxpayers in USA who are still involved in the disclosure of syndicated conservation easement transactions are reminded again by the IRS under Notice 2017-10. If you need help regarding IRS representation services in USA with best results, you can ask for free initial inquiry. You can also go through complete audit services in USA for your business and individual needs.

IRS Actions against Conservation Easement Transactions:

IRS Raises Enforcement; The Internal Revenue Service is coordinately examining the Small Business and Self-Employed Division, Large Business and International Division and Tax Exempt and Government Entities Division. Furthermore, the Criminal Investigation division of the IRS has also initiated its investigations. All these investigation and audits in the United States by the IRS are taking a large number of investors and partnerships as well as millions of dollars of potentially-inflated deductions in USA.

Notice 2017-10 shows a lot of the legitimate syndicated conservation easement transactions. The comprehensive compliance of IRS is focusing to remove the abusive conservation easement transactions in the United States. If the taxpayers in USA completely remove the improper contribution in addition to related tax benefits from their returns, then the imposition of penalties linking to improper contribution deductions can be avoided. This can be done by timely administrative adjustment request or timely filing of a qualified amended return. From the best financial planning to the excellent business advisory, Black Ink brings everything that you need for your taxation & accounting services requirements.

No doubt, the Internal Revenue Service (IRS) is fully committed with its job of ending up the abusive syndicated conservation easement transactions completely from the roots. Along with it, the IRS is also trying its best to hold the accountable entities as well as individuals who promoted, assisted or participated in such schemes. For this purpose, momentous examinations as well as investigative resources are committed with the IRS for the robust audit of the individuals and entities in the United States who are involved in this scheme as well as those who did not succeed in properly disclosing their participation as required. Not only this, strict legal actions are also being taken by the IRS in the necessary cases that include 80+ presently docketed cases in the Tax Court.

Besides foully overstating the worth of the easement that is supposedly donated to the charity, these transactions frequently fail to conform to the essential prerequisites for claiming a charitable deduction for the purpose of a donated easement. Most of the cases that involve such basic requirements have already been prevailed by the IRS and a body of law is established by the agency. The IRS body of law provides disallowance of the deduction in a noteworthy number of pending conservation easement cases. In those cases where it has not done yet, the IRS will be moving the Tax Court in a little while to cancel the claimed deductions in all cases where the transactions not succeed to act in accordance with the basic requirements, leaving no more than the final penalty amount to be calculated.

IRS Penalties for Conservation Easement Transactions:

IRS Raises Enforcement; Investigations of promoters, appraisers, tax return preparers and others taxpayers is also pursued by the IRS along with the audit of participants. Along with it, several referrals of practitioners to the IRS Office of Professional Responsibility are being evaluated by the agency.  All suitable penalties will be developed and asserted by the IRS. These penalties include penalties for participants (40% accuracy-related penalty), appraisers (penalty for substantial and gross valuation misstatements attributable to incorrect appraisals), promoters, material advisors, and accommodating entities (penalty for promoting abusive tax shelters and penalty for aiding and abetting understatement of tax liability), as well as return preparers (penalty for understatement of taxpayer’s liability by a tax return preparer). If you have any other question regarding IRS penalties & their guaranteed relief, you can request call back. We will get back to you within 24 hours.

Press Release on IRS Raises Enforcement:

The IRS Commissioner, Chuck Rettig, shared the statement in this regard and said,

We will not stop in our pursuit of everyone involved in the creation, marketing, promotion and wrongful acquisition of artificial, highly inflated deductions based on these aggressive transactions. Every available enforcement option will be considered, including civil penalties and, where appropriate, criminal investigations that could lead to a criminal prosecution. Our innovation labs are continually developing new, more extensive enforcement tools that employ advanced techniques. If you engaged in any questionable syndicated conservation easement transaction, you should immediately consult an independent, competent tax advisor to consider your best available options. It is always worthwhile to take advantage of various methods of getting back into compliance by correcting your tax returns before you hear from the IRS. Our continued use of ever-changing technologies would suggest that waiting is not a viable option for most taxpayers.

Notice 2017-10 (PDF) was issued by the IRS in December 2016 which designated listed transactions on behalf of syndicated conservation easements. Particularly, this Notice has those specific listed transactions in which the investors received promotional material in pass-through entities offering the chance of a charitable contribution deduction which costs at least two and half times of their investment. Furthermore, there are certain transactions showing that the deduction taken is considerably higher than 250% of the total investment amount. The IRS included the syndicated conservation easements in the IRS’s “Dirty Dozen” list of tax scams for 2019 in order to avoid them. On this behalf, Chuck Rettig said,

Abusive syndicated conservation easement transactions undermine the public’s trust in private land conservation and defraud the government of revenue. Putting an end to these abusive schemes is a high priority for the IRS.





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