Tax Court Shoots Down Vagueness Argument Over IRS Penalty Law

The government correctly determined a conservation easement was worth only a fraction of what the donor claimed, the US Tax Court said Monday, when it also rejected a constitutional challenge to a tax penalty law.

The IRS was correct that Paul-Adams Quarry Trust LLC’s 2017 easement donation for 207 acres in Georgia was worth $612,000, not $10.2 million as the partnership claimed, Judge Emin Toro said. Moreover, the court rejected Paul-Adams’ main argument against its 20% gross valuation misstatement penalty—that the tax penalty provisions in IRC Section 6662(h) should be voided because they are too vague to satisfy due process. ...