Washington – Today Rep. Mike Thompson (CA-05), Chair of the House Ways and Means Subcommittee on Select Revenue Measures introduced the Charitable Conservation Easement Program Integrity Act, a bill designed to stop abuses of the conservation tax incentive designed to protect public lands. A companion Senate bill was introduced by Senators Daines and Stabenow. A statement from Thompson is below.
“The Charitable Conservation Easement Program has been used for years to incentivize conserving our public lands and charitable giving. The program works, it is one of the most efficient land conservation tools at our disposal, and it has been a priority of mine for nearly two decades. That’s why I have reintroduced the Charitable Conservation Easement Program Integrity Act, a bill to protect the integrity of the program from the actions of a small minority of bad actors. This legislation prevents bad actors from abusing the Charitable Conservation Easement Program, which costs taxpayers billions of dollars. I look forward to advancing this legislation to continue protecting public lands for our next generation.”
The Charitable Conservation Easement Program Integrity Act of 2021 cracks down on abuse of the charitable conservation easement deduction, which is intended to promote the federal government’s efforts to preserve and protect public lands. Specifically, the federal government provides a tax deduction for the donation of a conservation easement to a land trust, which in turn is responsible for ensuring that the owner of the land or structure adheres to the terms of the easement. By donating the easement, a taxpayer ensures that the land will be preserved in its natural state in perpetuity.
Generally, the amount of the tax deduction corresponds to the foregone development value of the land. However, ”promoters” or “syndicators” have devised a tax shelter -- typically through single or multi-tier partnership – by grossly inflating the value of that development potential and offering investors a share of the tax deductions far in excess of their investments in the partnership. This legislation attempts to shut down these tax shelters by disallowing charitable deductions where the amount of the deduction claimed exceeds 250 percent of the total amount of investments attributable to the property that is the subject of the easement.
The bill complements actions by IRS and the Justice Department, which have been working since 2015 to crack down on abuse – including Justice Department civil suits and criminal charges against bad actors. You can click here to read text of the bill.