Partnership Fights $31 Million Tax Bill Over Land Easement Claim

A partnership challenged the denial of a $84.6 million charitable deduction and a $31.3 million tax assessment asserted by the IRS, asserting the disallowance was improper on multiple grounds.

Powhatan Coal Holdings LLC sued the IRS after rejecting the partnership’s 2021 tax deduction for its donation of a conservation easement of approximately 561 acres in Virginia, according to a petition in the US Tax Court. In challenging the notice of final partnership adjustment, Powhatan seeks the court to determine their 2021 partnership information return is accurate, not impose any adjustments or penalties, and to invalidate certain US Treasury Department regulations. ...