Overview
On February 24, 2022, a federal grand jury in Atlanta, Georgia returned a superseding indictment charging seven individuals with conspiracy to defraud the United States and other crimes, including wire fraud, money laundering, filing false personal tax returns and aiding and assisting in the preparation of false returns, arising out of their promotion of syndicated conservation easements dating back nearly two decades.1 The most serious charges carry a maximum sentence of 20 years in prison for each count.
According to the superseding indictment, the alleged promoters engaged in a conspiracy to design, market and sell false and fraudulent charitable contribution tax deductions to high-income clients based on inflated appraisals of the conservation easements that frequently valued the easements at amounts at least 10 times higher than the price that was actually paid for the partnership — often within months of the appraisals. The superseding indictment charges that the syndicated conservation easement transactions were abusive tax shelters lacking in economic substance or a business purpose. In total, the defendants allegedly sold over $1.3 billion in false and fraudulent tax deductions through their scheme.
The superseding indictment is the latest attack by the government related to conservation easements and follows the government's mixed success in Tax Court in denying charitable deductions, the issuance of Notice 2007-50 related to abusive transactions involving charitable contributions of easements, and the 2020 IRS Office of Chief Counsel announcement that it would offer to settle certain cases involving abusive syndicated conservation easement transactions.
Endnotes
1 DOJ Press Release 220178 (March 1, 2022), available at https://www.justice.gov/opa/pr/five-tax-shelter-promoters-and-two-appraisers-indicted-syndicated-conservation-easement-tax.