Partnership Concedes $43 Million Conservation Easement Tax Fight

A Missouri partnership settled a 2024 tax dispute with the IRS Thursday, agreeing to slash a $43.8 million charitable contribution deduction for a conservation easement donation to $0 and pay an assessed $16.2 million imputed underpayment.

Sanders Creek Owner LLC’s reported 2018 charitable contribution claimed after donating a more than 126-acre property in Taylor County, Fla., was eliminated, US Tax Court Judge Kathleen Kerrigan said.

Kerrigan sustained a 10% gross valuation misstatement penalty under IRC Section 6662(h), but determined Sanders Creek wasn’t liable for several other accuracy-related penalties originally asserted by the government, including negligence and substantial understatement ...