Congress must act to protect the permanent conservation easement tax incentive
By Kelley Beamer, Executive Director at the Coalition of Oregon Land Trusts
Published December 5, 2022 in Capital Press
When I think of Oregon, I think of vineyards in the Willamette Valley. Sagebrush in Central Oregon. Working forests and rocky shores on the Coast. Ranches and farmland in Wallowa County.
In Oregon, we are lucky. Many of our iconic landscapes are safeguarded by strong land protection laws and a strong network of land trusts. When we protect our land, we strengthen our communities and create a healthier planet—for people and wildlife.
One of the most powerful tools land trusts use to protect land is a conservation easement. This is a technical term but a simple concept. A private landowner agrees to protect their land for conservation purposes—and in return receives payment or tax benefits. A conservation easement is permanent and attached to the deed, so the public benefits remain even if ownership changes. In Oregon, land trusts steward and protect more than 300,000 acres—most of which were secured using conservation easements.
In 2015, Congress recognized the benefits of these agreements by creating a federal conservation easement tax incentive. This was a huge win for conservation because it incentivized private landowners, who are often land rich and cash poor, to work with land trusts to protect forests, streams and working lands.
Unfortunately, this powerful incentive is now under threat at a time when we need conservation dollars most. A loophole in that 2015 law has resulted in wealthy individuals abusing this incentive and siphoning dollars away from conservation projects and into their own pockets. While the vast majority of easement donations are good-faith charitable endeavors, a few bad actors are gaming the system.
Congress needs to act this year to stop the abuse by closing this loophole.
These bad actors can make large profits from this loophole, at the expense of US taxpayers. IRS data shows that these bad actors claimed $36 billion in tax deductions from 2010 to 2018.
We cannot allow our nation’s charitable giving laws to be abused in the name of conservation. It’s fraudulent and it erodes trust.
Fortunately, Oregon Senator Ron Wyden is leading the charge to shine a light on these abuses. He has called for an end to the loophole. To do this, Congress must pass the Charitable Conservation Easement Program Integrity Act before they adjourn in December.
Senator Wyden’s leadership on this issue led to a hard-hitting report in August 2020 that highlighted the problem and called for an end. He has continued to highlight the abuse both nationally and at home, including a multi-million-dollar project in Lincoln County where seven individuals were indicted for this kind of tax fraud.
The permanent conservation easement tax incentive is a powerful tool that has helped tens of thousands of Americans conserve public values on private land—places to fish and hunt, where wildlife can thrive and water sources are protected. Let’s not let it go to waste. Congress, please close this loophole before the end of the year.
