U.S. SENATE – U.S. Senator Steve Daines, Senate Finance Committee Chairman Chuck Grassley of Iowa, and Senate Agriculture Committee Chairman Pat Roberts of Kansas re-introduced the “Charitable Conservation Easement Program Integrity Act,” which will protect conservation easements from abuse, save taxpayers billions of dollars, and promote conservation in Montana and the U.S.
“This is about promoting conservation in Montana, saving taxpayers billions of dollars and stopping scam artists from abusing a critical conservation program used across the country,” Daines said. “I will fight to pass this important legislation and protect Montana farmers and ranchers who are guided by a good-faith desire to boost conservation, not their own wallets.”
“Sen. Wyden and I found in our recent report on syndicated conservation-easement transactions that Congress should take further action to end these abusive schemes. This bill makes clear they are not allowed under our tax laws. The IRS shamed these scammers by publicly listing these transactions, but the continued growth in their numbers shows that shame alone won’t do the trick. The IRS and the Department of Justice will continue to do their job enforcing the law. Now it’s the job of Congress to clearly prohibit these abusive schemes.” – Sen. Finance Committee Chairman Chuck Grassley (R-Iowa)
“This legislation confronts the well-documented abuse of syndicated conservation easement transactions and, by extension, protects the true integrity of the program. These abusive transactions come at significant expense to American taxpayers and undermine the family farms and ranches that use conservation easements as a legitimate charitable tool,” Roberts said. “Congress should act quickly and pass this bill this year.”
Despite increased enforcement from the IRS, recent IRS data shows the total amount of deductions claimed through these tax shelters increased from $6.8 billion in 2017 to $9.2 billion in 2018.
The Charitable Conservation Easement Program Integrity Act, which tracks an IRS Listing Notice published in December 2016, would generally disallow a charitable deduction if it exceeds 2.5 times (250%) of a partner’s original investment, but includes other measures to tighten the bill’s requirements. The bill preserves this deduction for people with true charity and conservation in mind, including for family farms and ranches.
To read the bill text, click HERE.
To review a technical summary of the changes to the new legislation, click HERE.
Organizations that support Daines’ current legislation include the Land Trust Alliance, Ducks Unlimited, and the American Society of Farm Managers and Rural Appraisers.
Background:
In late August, Daines renewed efforts to advance his bipartisan bill following the conclusion of a U.S. Senate Finance Committee investigation into abusive syndicated conservation easements. This updated legislation is the product of months of discussions with the Joint Committee on Taxation and stakeholders on how to ensure that the bill closes all loopholes that fraudsters might find to get around the new requirements.
On August 25th, 2020, Senate Finance Committee Chairman Grassley and Ranking Member Ron Wyden of Oregon released a bipartisan report on their 16-month investigation into the abuse of syndicated conservation-easement transactions.
On June 30th, 2020, Daines asked IRS Commissioner Rettig about the importance of passing his bipartisan Charitable Conservation Easement Program Integrity Act in a U.S. Senate Finance Committee hearing.
On January 17th, 2019, Daines introduced the bipartisan Charitable Conservation Easement Program Integrity Act of 2019, a bill that would curb abuses of the popular conservation easement tax benefit while allowing it to continue to serve as an important tool for conserving land and protecting family farms and ranches.