Deirdre Murphy
Phone: 202-228-5852
Citing Importance of Conservation Easement Program in Colorado, Lawmakers Urge Feds to Work With State to Provide Certainty to Landowners
Mark Udall and Michael Bennet, U.S. Senators for Colorado, today urged the Internal Revenue Service (IRS) to work with state officials to protect the long-term viability and integrity of Colorado's conservation easement program, citing steps the State has already taken to provide strong oversight and eliminate fraud while promoting conservation activities.
Colorado landowners' ability to pair state and federal tax benefits is part of what has made the state a national model for use of conservation easements and incentives. Combined state and federal efforts have protected over a million acres of land in Colorado.
Colorado has been in close communication with the IRS for years about the extensive auditing process the IRS undertook in 2006 and has yet to complete. Many of the audits remain unresolved to this day, leaving landowners and land trusts alike in limbo.
In a letter to IRS Commissioner Douglas Shulman, Bennet and Udall expressed concerns with the agency's ongoing audits of conservation easements in Colorado and called attention to recent actions taken by state agencies to improve and strengthen oversight of conservation easements.
"While we appreciate the need to examine these conservation easements to address any abuse, we believe that Colorado has been making great strides to ensure the legitimacy and appropriate value of associated tax benefits of conservation easements across the state," wrote Udall and Bennet.
"As a result, we would encourage the IRS to work with Colorado officials on these efforts so that we can help property owners-many of whom worked in good faith to establish these easements-resolve their tax issues and enjoy some certainty regarding their easements and tax obligations and liabilities," the lawmakers continued.
In addition, the lawmakers asked Commissioner Shulman for updates on the status of ongoing audits of existing conservation easements in Colorado, and pushed for answers on what methods and procedures the IRS is using as it carries out the auditing process.
The full text of the letter to Commissioner Shulman is included below:
The Honorable Douglas Shulman
Internal Revenue Service
1111 Constitution Avenue, Northwest
Washington, DC 20224
Dear Commissioner Shulman:
We are writing to express our concerns with the ongoing efforts by the Internal Revenue Service to audit conservation easements in Colorado. While we appreciate the need to examine these conservation easements to address any abuse, we believe that Colorado has been making great strides to ensure the legitimacy and appropriate value of associated tax benefits of conservation easements across the state. As a result, we would encourage the IRS to work with Colorado officials on these efforts so that we can help property owners-many of whom worked in good faith to establish these easements-resolve their tax issues and enjoy some certainty regarding their easements and tax obligations and liabilities.
Conservation easements are an important land management and land preservation tool in Colorado. A combined state and federal commitment to land preservation via a federal income tax credit, a state income tax credit, and the state's Great Outdoors Colorado Trust Fund collectively have made Colorado a national model for conservation incentives by carefully balancing regional economic needs with critical land and water preservation. Colorado's efforts combined with the incentives created by Congress have protected over a million acres of land in our state.
We want to bring to your attention some recent actions taken by Colorado that in our view should alreadyprovide strong oversight of conservation easements. In 2008, the state of Colorado enacted HB08-1353, important reform legislation to eliminate fraud while promoting conservation.
Specifically, the law set in place three important safeguards:
1. All conservation easements that result in a tax credit must now be held by organizations certified by the State.
2. All conservation easement appraisals must be submitted to the State for review.
3. The law created a Conservation Easement Oversight Commission to advise the Colorado Department of Revenue and Colorado Division of Real Estate regarding conservation easements.
These reforms have been very successful in eliminating abuse of the tax incentives Colorado has in place. We are pleased the State has taken steps to ensure that landowners can continue to utilize conservation easements to preserve farm and ranch land, maintain critical wildlife habitats and community recreation lands.
We also would like to take this opportunity to request an update from the IRS with regard to the status of ongoing audits of existing conservation easements in Colorado. Specifically, we would like the IRS to confirm:
1. How many total audits have been conducted in Colorado since 2005 and how many are in process now? How do these numbers compare with other states?
2. How did the IRS go about conducting the audits it undertook and if settlement was offered, what was the procedure used to notify individuals of the audit? How were any settlement offers made, what was the process for notification and what were the proposed terms of settlement?
3. Are the easements being audited based on the value of conservation qualities or the appraised easement value?
4. In auditing lands to determine land and tax credit values, did the IRS use certified appraisers that are familiar with Colorado land values? Are the comparable values that they used available for public review?
Coloradans consistently identify conservation as one of the most important issues facing them today. Maintaining these programs is also critical to our farmers and ranchers whose lands provide important agricultural products, wildlife habitat, water resources, and scenic vistas for which our state is famous. We are committed to working with you, our Congressional colleagues, the State, and with you to ensure conservation easements are utilized properly and remain a viable land preservation tool in our state and across the country. We look forward to your response.
]]> Land conservation leaders rallied recently in Portland, Ore., at a national land conservation conference.
Eighteen hundred participants representing 402 land trusts, including Lake County, attended the annual event sponsored by the Land Trust Alliance ( www.landtrustalliance.org ).
“To successfully conserve and protect important areas of Lake County, we must stay abreast of conservation trends, cutting-edge practices of land conservation, and best professional standards,” said Susanne Scholz, Land County Land Trust executive director.
She noted that America's land trusts have markedly enhanced their professionalism and increased their ranks to 1,667 in 2005 from 1,263 in 2000.
Conference topics included fundamentals of real estate law, conservation project appraisals and tax benefits, integrating multiple strategic land preservation objectives, and legal and ethical aspects of managing land trusts.
“Knowledge and resources gained in Portland benefit our work preserving Clear Lake's shoreline, between Clear Lake State Park and Lakeport, and Rodman Slough area,” said Scholz. “These are high priority projects based on known development and land conservation pressures.”
Important legislation discussed at the conference is HR 1831sponsored by US Representative Mike Thompson. HR 1831 will amend the 1986 Internal Revenue Code making permanent the special rule for contributions of qualified conservation contributions.
Representative Thompson and supporters pledge to make conservation easement tax incentive permanent in 111th Congress. This is indeed good news to conservationists everywhere, including Lake County.
The Lake County Land Trust is a private, nonprofit organization dedicated to protecting the county's important land resources.
Its stewardship includes Rodman Slough Preserve on Clear Lake and Rabbit Hill in Middletown.
The Land Trust spearheaded the preservation of Black Forest on Mt. Konocti and participated in the acquisition of Mt. Konocti by Lake County.
To support Lake County Land Trust, see www.lakecountylandtrust.org or call 707-994-2024.
Contact:
Russ Shay,
Director of Public Policy
202-638-4725, ext. 305
rshay@lta.org
Majorities of Both Parties Back Land Conservation Bill
WASHINGTON, DC -The Land Trust Alliance announced today that a majority of the House of Representatives – including majorities of both Democratic and Republican members – has co-sponsored legislation that will help protect millions of acres of the nation’s forests, agricultural lands and open spaces. H.R. 1831 makes permanent an expiring incentive that allows modest-income landowners to receive meaningful tax deductions for donating conservation easements that permanently protect important natural or historic resources on their lands.
Congressmen Mike Thompson (D-CA) and Eric Cantor (R-VA) have now recruited 232 co-sponsors for their Conservation Easement Incentive Act, H.R. 1831. This proposal has solid backing from every part of the country and from across the ideological spectrum, including a majority of both the Democratic and Republican members of the Ways and Means Committee.
“In this time when partisan conflict seems to be the norm, we are thrilled that Democrats and Republicans can agree on the importance of conservation,” said Land Trust Alliance president Rand Wentworth. “Unless Congress acts, this important tool for conserving special places across America will expire at the end of 2009. We look forward to working with all 232 co-sponsors to enact the bill this year.”
“We’ve seen a 50 percent increase in the number of conservation easement donations since Congress passed my provisions to enhance these tax benefits on a temporary basis in 2006,” said Congressman Mike Thompson (D-CA). “It’s time we made these protections permanent. By making sure that landowners can count on this, we’ll take a big step forward in protecting environmentally important lands and family farms.”
"Many families across Virginia have made great use of this tax deduction. Providing permanent incentives for easements is smart policy to promote conservation," said House Republican Whip Eric Cantor (R-VA).
Senate Finance Committee chairman Max Baucus (D-MT) and ranking member Charles Grassley (R-IA) have secured 30 co-sponsors for companion legislation in the Senate, the Rural Heritage Conservation Extension Act, S. 812. For a complete list of House and Senate co-sponsors, please visit www.lta.org/easementincentive/cosponsors.
The Land Trust Alliance is a national conservation group that works to save the places people love, working with nearly 1,700 local, regional and national nonprofit conservation organizations. It works to increase the pace and quality of conservation by advocating favorable tax policies, training land trusts in best practices, and working to ensure the permanence of conservation in the face of continuing threats.
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