Partnership Disputes Denial of $40 Million Conservation Easement

The IRS failed to support its denial of a partnership’s claimed $40 million conservation easement deduction as well as the $5.98 million misstatement penalty the agency imposed, according to a petition filed with the US Tax Court.

Casper Grove LLC, which donated the 123-acre property in Jackson County, Ala., in 2020, says the IRS didn’t adequately describe the basis for its adjustments and ensuing penalties, leaving the partnership unable to respond effectively.

The IRS disallowed the partnership’s deduction in tax year 2020 and imputed an underpayment of $14.98 million and asserted penalties, stating that Casper Grove didn’t prove it made ...