Being audited by the IRS? Did your broker sell you a conservation easement that the IRS is now investigating? Did you get hit with interest, penalties and fines? If your financial advisor sold you a conservation easement without disclosing these risks they may be liable for your losses. Soreide Law Group has filed several conservation easement loss cases against financial advisors and recovered significant money for our clients. Here is a brief history of conservation easements and why you should consider consulting an experienced securities lawyer who has handled these cases before. If you want to skip reading this post and just speak to a lawyer now call 888-760-6552.

What is a conservation easement?

A conservation easement provides for the preservation of property by permanently restricting development, commercial, industrial and other intrusive uses on the protected property. Typically used by landowners to permanently preserve existing natural environments and agricultural uses, conservation easements are a private action taken on private land that create a legally enforceable land preservation agreement between the landowner and a qualified land protection organization such as a land trust that is empowered and willing to enforce such an agreement. Following the recording of a conservation easement, the existing owner of the land remains the owner, and the property can be bought and sold. Use of the property is permanently restricted by the terms of the easements. Donors who follow the requirements set for in section 170 of the Internal Revenue Code (“IRC”) may be eligible for a federal income tax deduction equal to the value of their donation. The value of the easement donation, as determined by qualified appraisers, equals the difference between the fair market value of the property before and after the easement takes effect. Conservation Easements are considered by the Internal Revenue Service “IRS” to be charitable contributions and the easements must satisfy the criteria set forth by the IRS for special tax incentives.

One major problem with a conservation easement for any investor is that the amount allowable by the IRS as a deduction with respect to a charitable contribution of the property is the value determined by the fair market value of the property donated (i.e., the price at which the property would change hands between a willing buyer and a willing seller on the date of the gift.) See Treas. Reg. Sec. 1.170A-1(c)(2).Conservation easements, however, normally are granted by deed of gift. As a result, there is rarely an established market that can be referred to in order to determine the value of the donated asset. The test the IRS will use is the fair market value of the property over which the easement was granted before the conveyance of the easement with the fair market value of the property after the easement is conveyed.

What are the Pit Falls?

Investors in conservation easements are subject to huge audit risks due to defective false and misleading appraisals. To make conservation easements attractive to investors many conservations easements “deals” dramatically over inflate the price of the donated land to maximize the tax deduction. The IRS is reappraising many of these deals and our law firm has found that the discrepancy between the IRS’ appraisal and the appraisal done by the conservation easement has been in some instances our investigation has found a value discrepancy of over 50 between the appraisals of the conservation easement and the IRS. That is a huge red flag and the IRS’ appraisal will more likely be founded in reality given that there is no incentive to artificially inflate the property value to maximize the tax deductions by the unit holders. These deals can be ripe with fraud and have discrepancies which are almost the equivalent of not being able to tell the difference between a double wide trailer and a beach front mansion.

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What Conservation Easements are we investigating/watching that may have potential problems with the IRS?

Here is a list of conservation easements that we are investigating. Not all of these are being audited and may never be audited but this is a comprehensive list of conservation easements that the IRS may take issue with:

So what can you do about it?

If you were sold a conservation easement that is under audit from the IRS or recently disallowed by the IRS visit https://www.SecuritiesLawyer.com.  An experienced securities attorney can file a claim against the financial advisor that sold the deal without doing adequate due diligence into the validity of the appraisal. Given that many of these representatives are FINRA registered representatives the lawsuit will be filed in the FINRA forum against the brokerage firm the representative worked for. Soreide Law Group handles claims in the FINRA forum nationwide and if you feel you were a victim of a conservation easement fraud sold to you by a financial advisor call 888-760-6552. We offer free consultations and there is no fee if we do not recovery money.

Crimson S&G Group
FCT Investments
Quality Minerals Partners
Cub Creek Reserve Investments
Gretsch Investments
Berkley Road Investors
KC Aggregates Group
Regional Minerals Partners
Green Cove Group
Two Chip Investors
Bellavista Grove Holdings
Gray Mountain Investors
KR Stone Group
Yellow River Investors
Wahoo River Investments
Waterway Grove Holdings
River Ridge Retreat Investments
Sunfish Cove Group
Orange Woods Partners
Aquatic Creek Group
Pleasant Ridge Investors
Bayou Sand Investors
Dixie Lake Investments
Cayo Marsopa Holdings
Lexington Property Investors
Anderson Pointe Investments
Roaring Florida Acquisitions
QM 40
Harrow Aggregates Partners
Beech Springs Resort Holdings
Cypress Rock Group
Horshoe Bend Investors
Peeksville Investments
Magnolia River Group
Little Pumpkin Creek Investors
White Oak Investments
Carey Station Investors
Azalea Bay Resort Holdings
Laurel Creek Investors
TH 28 Partners
Spring Hill Partners
Storey Hollow Investments
Greenview Group
Oconee Quarry Investors
Gulf Land Group
Broad River Investors
Emerald Acquisitions 2015
Little Pumpkin Creek North Investments
Timothy Investors
Vibrant Minerals Investments
Tarpon Creek Investments
River West SC
Spring Creek 1600 Acquisitions
Bear Creek Investors
Rabbit Bar Point Investments
Lavis Properties Investors
Seven Hawks Investments
RDM Land Holdings
Rock Spring Investors
Sand Valley Investors
Sailfish Cove Group
LMS Grande Pointe
South Bay Cove Holdings
Seavista Resort Holdings
Tennessee Branch Partners
Blue Ridge Valley Investments
Cherry Rock Group
Ardan Investors
Lion’s Gate Investments
Quail Rock Group
Nassau River Partners
Riverside Preserve Holdings
Two Chip
Canary Creek Partners
Avalon Resources Group
Vineyard Ridge Investors
Jackson River Partners
Dynamite Creek Partners
Battelle Investment Group
Big Anvil Partners
Galley Resources Partners
Parkerson Sands Investments
Parkerson Church Reserve Investments
Orange Stone Group
Jet Rock Partners
Falling Rock Group
Sycamore Fork Investments
Deep Green Investments
Kinchafoonee Properties
Emerald Acquisitions 2017
Manatee Minerals Group
Harmon South Investors
Northwest VI Investments
Ivery Branch Investors
Mill Creek Investors
Palmetto Waters Group
South Quail Woods Investors
Harmon North Investments
Dry Mill Creek Investments
Echelon Waters Group
Little Pumpkin Creek Investors
West Lake Investments
Quorum Holdings Partners
Bickford Farm Investments
Cape Fear Pointe Holdings
Northshore Property Investments
CXI Properties
Little Cedar Stands Investments
Inshore Group
Union Creek Investments
Tick Creek Holdings
Jackson North Investments
Brush Creek Holdings
Hillside View Partners
Zenith Aggregates Partners
North Unity Henry 92 Investors
Derrydown Investors
Deer Valley Group
Duck River Investments
Edge Rock Partners
NATRSC Investments
Clinton Investments
Jackson South Investments
Hazel Hollow Investments
Picayune Pearl Aggregates Investors
Bradford Investors
Browndale Plantation Reserve Investments
Camellia Station Holdings
Oconee Landing Investors
College Creek Investors
Beaverdam Creek Investors
Centerland Group
Emerald Acquisitions 2016
Carl Parker 52 Investors
Dry Creek Partners
LM Bass Partners
Elbow Creek Group
Zorn Island Investments
Bama Soil Partners
Piney Island Investors
Iris Partners
Riddle Aggregates Group
Tater Creek Investments
Roscoe Road Investors
Yellowhammer S&G Group
Oak Bayou Group
830 Oconee
Queen’s Cove Holdings
Little River Partners
Reliable S&G Group
Daniel Creek Investments
Old Durrand Investments
Green Valley Investors
Dev X Investment 2015
Raisal Holdings
CGP Net Lease Mezz Equity I
Diamond Grande Resort Holdings
Ocean Grove Resort Holdings
Pallur Investors
North Bay Cove Holdings
Norma Dean I Investors
Richland Creek Investors
North by Northwest II
191 Partners LP
JC Aggregates Partners
Hard Rock Partners
Yankee Landing Holdings
Brand Rock Investments
McGill Investors
Bates Investments
Vista Hill Investments
Jones County Quarry Investors
Big Hill Partners
Quality Stones Group
Southeastern Argive Investments
Arcadian Quay Holdings
Matterhorn Property Investors
Paoli Investors
15th Street Partners
Emerald Acquisitions 2014
Fork Creek Partners
Spade Rock Partners
Imperial Aggregates Group
Fantail Holdings Partners
Yield Rock Group
Crestlawn Investors
Crockett Investors
Zebra Creek Rock LLC
Harris Top Investors
Belvoir Investors
Park Lake III
Palmetto Minerals Investors
Dover Cliff Partners
Northwest VII Investments
Bienville 75 Acquisitions
Barn Creek Partners
Tanyard Investors
Bonlee Investment Properties
Rivershore Sand Investors
Tom’s Mountain Creek Investments
Yacht Creek Investments
Delta Sand Investors
Cason Investments
Lakeshore Resort Holdings
Lowland Creek Partners
Forestar Investors
Sanibel Resort Holdings
Huston Minerals Partners
Bear Creek Timberland Investments
Roan Creek Investments
Emerald Property Investors
Bear Creek Investors
Hornet’s Nest
Blue Springs Investors
Rocky Branch Investments
Sterling Land Partners
Cypress Cove Marina Holdings
Little Satilla Investors
Longwood Preserve Investors
Halyard Holdings Group
Magnolia Bay Resort Holdings
Leach Road East
White Path Investors
Ginn Creek Investments
Monterry Cove Holdings
Locust Creek Investors
Low Angle Group
Upland Creek Partners
Flint River Rock & Timber Investments
Harmon INV
Lamstall Investors
Carter Investors
River Trace Resort Holdings
Rising Rock Partners Investments
Toscano Investments
Otter Rock Investments
Shurling Investments
Adam Smith Ventures
Brushy Hollow Investments
Little Horse Creek
Igneous Rock Group
Tennessee Ranch Estates Investors
Dome Mantle Partners
Cox Point Plantation Investors
Ash Resources Group
Preservation Group
Field View Group
Jubilee Investment Holdings
Farm River Partners
Basin Timber Holdings
Belle Harbour Resort Holdings
Coastavista Palms Holdings
Gulf Land Investment Partners
Cherokee 389 Investments
Strategic Real Estate Opportunity Fund III
Basin Mountain LLC
Myrtle West Resort Holdings
Giant Aggregates Partners
Rabun Gap Partners
North Donald LA Investors
Benton INV
Harmony Road Investors
Nottely River Partners
White Sands Village Holdings
Ranch Springs Investors
Rocky Comfort Creek Investors
Broadmoor Quarry Investors
Chimney Rock Group
Mattock Holdings Group
Glady Fork Partners
Georgetwon Riverfront Partners
FG River Partners
Glade Creek, LLC
Albero Investors
Briar Patch Investments
Salt Marsh Holdings
Cristobal Key Holdings
Desoto Investors
Marchette Investments
Payne Creek Investors