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Important Message on Substantiation Letters, 128 Co-sponsors

Advocates Alert: June 8, 2009

IRS Denying Easement Deductions that Lack Substantiation Letters

This week we have an important message about donations to your land trust.  Whatever you have been told or assumed, the failure to provide contemporaneous written substantiation letters to donors of easements or land could make them vulnerable to audit.  We need your help spreading the word to other land trusts and conservation agencies in your region.

A recent Federal District Court decision, Bruzewicz v. USA, invalidated the tax deduction of an easement donor because they did not have a letter from the donee describing their donation AND declaring that the donee provided no goods or services in exchange for the gift (or stating the value of goods in the case of a bargain sale).

In recent months, the IRS has repeatedly asserted that the requirement for a "contemporaneous written substantiation," required by Internal Revenue Code section 170(f)(8) is NOT met by the signing of a Form 8283.

To help landowners avoid audits on this point, land trusts should send each donor of a conservation easement (or any charitable contribution valued at $250 or more), a separate letter or postcard acknowledging the gift and specifying if the donor received any goods or services in return.  The donor must keep this communication -- and the land trust should also keep a copy.

Click here for more information and advice on how to proceed if you haven't sent such letters in the past.

Easement Incentive Bills Have 128 House and 15 Senate Co-Sponsors

Legislation to make the enhanced tax deduction for conservation easement donations permanent is making great strides, but we need your help gathering even more co-sponsors.

The Conservation Easement Incentive Act, H.R. 1831, now has 128 co-sponsors, but 60 co-sponsors of the same bill in the last Congress (2008's H.R. 1576) haven't yet signed-on!

Renewing their support ought to be an easy ask, but many will insist on hearing from constituents before signing-on. Don't assume someone else is asking! Even if you've called or written, please don't hesitate to follow-up with a reminder call or email to your Representative's tax staffer.  Staff tell us they're busier than ever and need constant reminders on this sort of thing.

A call from you could be the key!  To reach any Congressional office, simply call the capitol switchboard at 202-224-3121.  You can offer to follow-up with an email and include one of our recently-updated fact sheets or several letters of support from our coalition partners.  The latest addition was a letter from American Farmland Trust and more are in the works.

Here's the list of 60 previous co-sponsors mentioned above.  Please thank them for co-sponsoring H.R. 1576 last year, and urge them to co-sponsor H.R. 1831 in the new Congress:

  • Rep. Jo Bonner  (R-AL)
  • Rep. Xavier Becerra  (D-CA)
  • Rep. Howard Berman  (D-CA)
  • Rep. Darrell Issa  (R-CA)
  • Rep. Doris Matsui  (D-CA)
  • Rep. Ed Perlmutter  (D-CO)
  • Rep. Michael Castle  (R-DE)
  • Rep. Allen Boyd Jr. (D-FL)
  • Rep. Vern Buchanan  (R-FL)
  • Rep. Mario Diaz-Balart  (R-FL)
  • Rep. Kendrick Meek  (D-FL)
  • Rep. Ileana Ros-Lehtinen  (R-FL)
  • Rep. John Lewis  (D-GA)
  • Rep. Jim Marshall  (D-GA)
  • Rep. Leonard Boswell  (D-IA)
  • Rep. Bruce Braley  (D-IA)
  • Rep. Tom Latham  (R-IA)
  • Rep. Phil Hare  (D-IL)
  • Rep. Andre Carson  (D-IN)
  • Rep. Baron Hill  (D-IN)
  • Rep. Jerry Moran  (R-KS)
  • Rep. Todd Tiahrt  (R-KS)
  • Rep. Jim McGovern  (D-MA)
  • Rep. Richard Neal  (D-MA)
  • Rep. Roscoe Bartlett  (R-MD)
  • Rep. Dutch Ruppersberger  (D-MD)
  • Rep. Chris Van Hollen Jr. (D-MD)
  • Rep. Candice Miller  (R-MI)
  • Rep. Bart Stupak  (D-MI)
  • Rep. Fred Upton  (R-MI)
  • Rep. Michele Bachmann  (R-MN)
  • Rep. Paul Hodes  (D-NH)
  • Rep. Carol Shea-Porter  (D-NH)
  • Rep. Scott Garrett  (R-NJ)
  • Rep. Frank LoBiondo  (R-NJ)
  • Rep. Bill Pascrell Jr. (D-NJ)
  • Rep. Don Payne  (D-NJ)
  • Rep. Gary Ackerman  (D-NY)
  • Rep. Yvette Clarke  (D-NY)
  • Rep. Carolyn McCarthy  (D-NY)
  • Rep. John McHugh  (R-NY)
  • Rep. Gregory Meeks  (D-NY)
  • Rep. Jerry Nadler  (D-NY)
  • Rep. Jose Serrano  (D-NY)
  • Rep. Louise Slaughter  (D-NY)
  • Rep. Ed Towns  (D-NY)
  • Rep. Nydia Velazquez  (D-NY)
  • Rep. Marcy Kaptur  (D-OH)
  • Rep. Steve LaTourette  (R-OH)
  • Rep. Tim Ryan  (D-OH)
  • Rep. Pat Tiberi  (R-OH)
  • Rep. Lincoln Davis  (D-TN)
  • Rep. Bart Gordon  (D-TN)
  • Rep. Zach Wamp  (R-TN)
  • Rep. Sam Johnson  (R-TX)
  • Rep. Ciro Rodriguez  (D-TX)
  • Rep. Jim Matheson  (D-UT)
  • Rep. Randy Forbes  (R-VA)
  • Rep. Paul Ryan  (R-WI)
  • Rep. Nick Rahall II (D-WV)

We're also excited to see that several first-time co-sponsors of S. 812, have brought our total to 15 Senators!  We appreciate your initiative in seeking Senate co-sponsors, but need your help remaining focused on the House of Representatives, where our greatest challenge lies.

Thanks for helping!

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July 17: The House just voted 277-130 to pass the charities package! 56 Democrats joined their Republican colleagues to support charitable giving incentives, including the enhanced easement incentive - the second-highest number of defections after the research and development tax credit. Several others spoke on the floor in support of the conservation easement incentive, and other favorable charitable incentives. Thank you to organizations like Ducks Unlimited, CSF and others that reached out to Congressional offices over the last few days or alerted their membership of this important vote. Now, we pivot to the Senate.
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