Service Reviews Written Acknowledgment Requirements for Conservation Easements

Service Reviews Written Acknowledgment Requirements for Conservation Easements

News story posted in Email Chief Counsel Advice on 3 December 2008| comments
audience: National Publication | last updated: 18 May 2011
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Summary

In emailed Chief Counsel Advice pursuant to a pending case, the IRS reviews the contemporaneous written acknowledgment requirements for gifts of conservation easements under section 170(f)(8)(A).

PGDC Editor's Note: The following document contains the acronym citation of ECC.  A call to the IRS Office of Chief Counsel revealed this citation is a creation of Tax Analysts, Inc. and not the IRS. It refers to emailed Chief Counsel Advice the IRS must now release under IRC section 6110 pursuant to the decision in Tax Analysts v. Internal Revenue Service, 495 F.3d 676 (D. C. Cir. 2007). For further information on this case, see the attached Notice at the bottom of this page.

ECC 200848076

Full Text:

UILC: 170.18-00
Release Date: 11/28/2008

ID: CA_2008082713405950

From: * * *
Sent: Wednesday, August 27, 2008 1:41:01 PM
To: * * *
Cc: * * *
Subject: Conservation easement case

No deduction is allowed under § 170(a) for a qualified charitable contribution (including a qualified conservation contribution) of $250 or more unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgment of the contribution by the donee organization. IRC § 170(f)(8)(A). If an acknowledgment fails to contain the required information or the taxpayer fails to receive the acknowledgment within the required time, § 170(f)(8)(A) is clear that no deduction under § 170 is allowed (i.e., taxpayers may not cure the defect after the fact and receive a whole or partial deduction). See, e.g., Addis v. Commissioner, 374 F.3d 881, 887 (9th Cir. 2004) (consequence of acknowledgment that did not contain required information is total denial of deduction; partial deduction foreclosed by statute), affg. 118 T.C. 528 (2002).

Content of acknowledgment. A contemporaneous written acknowledgment with respect to the contribution of a conservation easement to a donee organization must include the following information:

    1. a description (but not necessarily the value) of the property contributed;

    2. whether the donee organization provided any goods or services in consideration, in whole or in part, for the contributed property; and

    3. if goods or services were provided in consideration for the contributed property, a good faith estimate of the value of such goods or services. IRC § 170(f)(8)(B); Reg. § 1.170A-13(f)(2).

"Goods or services" includes cash. Reg. § 1.170A-13(f)(5).

Timing of acknowledgment. The acknowledgment required under § 170(f)(8)(A) is considered to be "contemporaneous" if the taxpayer obtains the acknowledgment on or before the earlier of --

    1. the date on which the taxpayer files a return for the taxable year in which the contribution was made, or

    2. the due date (including extensions) for filing such return. IRC § 170(f)(8)(C); Reg. § 1.170A-13(f)(3).

A writing that: (1) does not acknowledge a contribution of property but, instead, merely evidences a sale of the property (regardless of the actual value of the property) and (2) does not include a statement of whether any goods or services have been provided for the contribution is not a contemporaneous written acknowledgment under § 170(f)(8). A writing that does contain the required information under § 170(f)(8)(B) must be received by the taxpayer before the taxpayer files its original return for the taxable year in which the contribution was made (or the due date, including extensions, for filing that return -- whichever is earlier).
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