IRS RESPONSE TO RECOMMENDATION: We share the goal of preventing unnecessary litigation by making it easier for taxpayers to draft conservation easement deeds that are fully compliant with the requirements set forth in I.R.C. § 170(h) and the regulations, and agree to implement TAS’ recommendation in part. To that end, we released Chief Counsel Advice, CCA 2020-02011 (Jan. 10, 2020), that provides sample language for a constructive denial clause within a conservation easement deed, as well as a General Legal Advice Memorandum, GLAM 2020-001 (Mar. 27, 2020), providing sample language to amend a conservation easement, both of which are consistent with the perpetuity requirements set forth in I.R.C. § 170(h). The Office of Chief Counsel (Counsel) will consider publishing formal guidance containing sample clauses, while continuing to balance guidance priorities as a whole. In the meantime, Counsel plans to continue drafting and releasing informal guidance including sample clauses that taxpayers may use when drafting conservation easement deeds.

CORRECTIVE ACTION: The Office of Chief Counsel (Counsel) will consider publishing formal guidance containing sample clauses, while continuing to balance guidance priorities as a whole. In the meantime, Counsel plans to continue drafting and releasing informal guidance including sample clauses that taxpayers may use when drafting conservation easement deeds.

TAS RESPONSE: The National Taxpayer Advocate is pleased the IRS recognizes that additional guidance may avert litigation. As noted in the report, the guidance the IRS provided in 2020 was welcome. We look forward to additional guidance that may help taxpayers navigate these complex issues and help prevent unnecessary litigation.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A