Congress passed the Charitable Conservation Easement Program Integrity Act (the “Integrity Act”) as part of the year-end omnibus spending bill, signed into law on December 29, 2022.  This legislation effectively disallows certain abusive and fraudulent deductions seeking to use the federal conservation easement tax incentive as a tax avoidance scheme.

The Integrity Act also provides taxpayers the time-limited opportunity to replace specific provisions of their conservation easements pertaining to boundary line adjustments and extinguishment proceeds. The IRS has deemed this language problematic, and may use it for grounds to deny a federal tax deduction. However, the IRS has issued “safe harbor” language with which to amend existing conservation easements.

Conservation easement donors who claimed a charitable deduction may wish to consult with their legal and tax advisors to determine whether they are impacted by the Notice (see below).  This is a complex topic, largely dependent on the donor’s specific situation. The IRS has provided a narrow window of time to take action, before July 24, 2023. Click HERE for more info.

NRCS assists private landowners with conserving their soil, water, and other natural resources.  Cost sharing and financial incentives are available in many cases.  They can help create a conservation plan for agricultural properties.  Every county in North Carolina and Tennessee is served by a NRCS office. It is important to note that some service centers serve more than one county, so your designated service center may not be located in your county. Click HERE to find your local service center.