Conservation Easements Labeled Tax Scams By IRS
Conservation easement syndicates landed on the IRS’ 2021 “Dirty Dozen” tax scam list. This demonstrates the attention the IRS is paying to these investments and the IRS’ increased efforts to crack down on investors who benefitted from EcoVest’s and other conservation easements’ tax deductions.
Conservation easement investments involve bundling investors’ funds into “syndicates” that in turn purchase conservation easements on private land. The easements are then donated at an appraised value that is substantially higher than what the syndicates paid for them. Because the land in question was appraised well above fair market value, investors are able to reduce their own tax burdens by several multiples of their principal investment.
Department Of Justice Takes Aim At EcoVest Capital
Late last year, Department of Justice filed a Complaint against EcoVest Capital, one of the major players in creating these conservation easement syndicates. Among other things, the Complaint alleges:
- Defendants organize, promote, or sell (or assist in the organization, promotion and sale of) a highly structured – and abusive – tax scheme involving the syndication of conservation easement donations.
- Defendants’ conservation easement syndication scheme amounts to nothing more than a thinly veiled sale of grossly overvalued federal tax deductions under the guise of investing in a partnership.
- As a result of the false statements made by or caused by Defendants, [investors] claim improper and grossly overvalued federal tax deductions on their tax returns.
According to the lawsuit, between 2013 and 2018, EcoVest organized 58 different conservation easement syndicates, via front-line sellers in 28 states, with reported non-cash charitable deductions of almost three billion dollars.
While the Department of Justice took aim at EcoVest, the IRS is focused on obtaining unpaid taxes from investors who claimed these “abusive” deductions.
Stockbrokers And Financial Advisers That Sold Conservation Easements May Be Liable
Many stockbrokers and financial advisers recommended EcoVest and other conservation easements to their clients as a way to reduce their tax burden. Unfortunately, brokerage firms and advisers failed to investigate and understand the flaws in these products and/or failed to disclose these risks and flaws to their customers. If you have suffered losses, in the form of a tax penalty or otherwise, the seller may be liable to you for damages.
Silver Law Group Can Help Recover EcoVest Losses
Silver Law Group is a team of investor advocates that can help you recover improper losses. Silver Law Group is experienced in representing investors in securities and investment fraud cases. Our lawyers represent victims of stockbroker misconduct and handle most cases on a contingency fee basis, meaning you won’t owe us any money until we recover for you.
Did you purchase interests in a conservation easement syndicate such as EcoVest? If you face losses because your broker or financial advisor recommended an EcoVest conservation easement syndicate, contact Silver Law Group for a confidential consultation at (800) 975-4345 or email ssilver@silverlaw.com.