Conservation Easements: Defending IRS Challenges, Overcoming Audits, Structuring Deed Language for Perpetuity

Note: CPE credit is not offered on this program

Recording of a 90-minute CLE webinar with Q&A

Conducted on Wednesday, September 9, 2020

Recorded event now available

or call 1-800-926-7926
Course Materials

This CLE course will address how to defend IRS attacks on conservation easement deductions. The panel will discuss the most common methods of attack, the impact on the transaction's viability, and guidance on staving off challenges and preserving both the deal and the tax benefits for potential donors.


Conservation easements are as varied in purpose as the land they protect. The easements are tailored to specific conservation objectives as well as the needs of the landowner. The conservation objective can be as narrow as protecting a particular body of water or animal habitat or structured broadly to more generalized preservation efforts, like safeguarding farmland or ensuring unobstructed views.

In the case of donated conservation easements, the benefit to donor-landowners can be myriad, not the least of which are the considerable tax advantages available. Recent IRS attacks on those benefits have been rooted firmly in challenging the issue of perpetuity.

Practitioners structuring conservation easements must be wary of the IRS' most common methods of attack and careful to employ language capable of deflecting those challenges. The proceeds clause, for example, provides the agency with a multi-tiered opportunity to unseat landowners' deduction rights based on a violation of the perpetuity requirement.

IRS assertions include: the proceeds allocation formula fails to protect conservation purposes, reserving proceeds attributable to post-easement improvements frustrates perpetuity, and land trusts must have a vested interest in proceeds of third-party contracts like insurance coverage. IRS actions are increasingly causing attorneys to craft deed language that preserves easement deductions for donors.

Listen as our panel of attorneys discusses how to structure conservation easements to withstand IRS attacks, and offers practical guidance on overcoming challenges once presented.



  1. Conservation easements overview
  2. Preserving the deduction through careful drafting
    1. Guidance for donor-landowners
    2. Guidance for donees
  3. Troublesome clauses
    1. Deemed consent provisions
    2. Proceeds clause
      1. Proceeds allocation formula
      2. Proceeds attributable to post-easement improvements
      3. Proceeds from third-party contracts
    3. Amendment clause
    4. Merger clause
    5. Reserve development sites
    6. Form 8283
  4. Case law developments


The panel will review these and other key issues:

  • What are the most common methods of attack on easement deductions?
  • How can counsel reconcile the apparent discrepancy in how tax courts and the IRS address perpetuity issues in conservation easement deeds?
  • What are the more troublesome agreement provisions for counsel preparing a sturdy conservation easement?


Asbury, Anson
Anson H. Asbury, J.D., LL.M.

Founder and Principal
Asbury Law Firm

Mr. Asbury has represented clients in federal and state tax controversies, tax litigation, business tax planning and...  |  Read More

Gardner, Brian
Brian Gardner, J.D., LL.M.

Asbury Law Firm

Mr. Gardner focuses his practice on tax controversy and litigation matters. He represents taxpayers in all phases of...  |  Read More

Rhodes, Gregory
Gregory P. Rhodes

Sirote & Permutt

Mr. Rhodes’ practice focuses on tax controversy and litigation work, as well as tax planning for individuals and...  |  Read More

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