Senator Steve Daines Seeks Passage of the Charitable Conservation Easement Program Integrity Act

U.S. Senator Steve Daines (R-MT) is making a renewed push to restore the integrity of donations by passing S.170, the Charitable Conservation Easement Program Integrity Act, which he co-sponsored with Senator Debbie Stabenow (D-MI).

This legislation focuses on a tax incentive created by Congress in 1976 to encourage and facilitate the protection of America’s lands, waters, and wildlife by allowing taxpayers to deduct from their taxable income any charitable donations made for land conservation. 

While the incentive itself has been highly successful—more than 56 million acres have been privately donated and conserved—the unfortunate fact is that some bad actors have been taking advantage of the provision to reduce their tax obligations by illegitimate and often outlandish amounts. A recent Senate bipartisan report revealed significant abuse using syndicated transactions.  According to the IRS, unwarranted tax deductions have surpassed $20 billion, and its efforts to discourage and prevent such abuses have not been successful. Senator Daines’ legislation would put a stop to the fraud while protecting honest donors and taxpayers.

A few years ago, IRS Notice 2017-10 tried to crack down on the syndicated conservation-easement transactions in question and deemed them tax shelters. In response, several of the very companies considered to be guilty of cheating the system hired lobbyists and sought to prevent the IRS from enforcing the notice.

“While lobbying is Washington’s stock in trade, it is rare when it comes to protecting a practice that the government has labeled as a tax shelter,” reported the Wall Street Journal at the time.

There were also efforts on the other side, as the Land Trust Alliance fought to keep Congress out of any IRS policing of conservation-easement transactions.

The purpose of S.170 is designed to counter those who are trying to take advantage of the system, while still encouraging and allowing honest donations towards conservation; protect the interests of all taxpayers and the reputation and work of land appraisers; and facilitate the ability of Congress to address and remedy these issues by providing this viable solution.

“Ultimately, land conservation incentives should inspire charitable giving, not wrongful profiteering,” wrote Andrew J. Bowman, president of the Land Trust Alliance, and Stephen S. Wagner, president of the Appraisal Institute.

Congress’ Joint Committee on Taxation predicts federal revenue gains of $6.6 billion as a result of S.170, since it will essentially limit tax deductions for qualified conservation contributions. This limit does not apply to family partnerships.

“My bipartisan bill will protect this critical conservation tool by stopping abuse from bad actors,” said Senator Daines. “The massive $6.6 billion revenue estimate shows that, despite previous IRS guidance, abuses have continued and it demonstrates the need to bring integrity back to this program so it can be used for years to come.”

ConservAmerica strongly supports this important reform and is working with the bill sponsors to include a provision that would encourage greater investment in ecological sensitive lands, including those to protect imperiled species, that truly warrant protection. With over 70% of America’s threatened and endangered species on private lands, proactive efforts by private landowners including the use of conservation easements is integral to sustainable resource management.