Fox Team Secures Precedent-Setting Victory In Conservation Easement Battle

May 14, 2020 – Press Releases

A Fox Rothschild team of tax attorneys secured a precedent-setting victory in the Eleventh U.S. Circuit Court of Appeals in a battle with the IRS over a golf course’s conservation easement deduction.

The three-judge panel found that the charitable deduction claimed by Champions Retreat Golf Founders, LLC was proper because its donation of 348 acres to a land trust was made for the protection of an ecosystem or the preservation of open space for the scenic enjoyment of the general public.

“Because the [Tax] Code does not disqualify an easement just because it includes a golf course, we reverse the Tax Court’s decision and remand for determination of the proper amount of the deduction,” the appellate court said in its 22-page decision.

“We’re thrilled with this decision because it accomplishes the original goal of the conservation easement deduction,” said Fox Rothschild partner Vivian D. Hoard. “This law was designed to encourage property owners to resist the temptation to develop and instead to make a commitment to preserving the land as it is currently being used, in perpetuity, as both an ecosystem and as an open space for the scenic enjoyment of the general public.”

In its decision, the court noted that the easement property “is home to abundant species of birds, some rare, to the regionally declining southern fox squirrel, and to a rare plant species, the denseflower knotweed.”

Although the property is not accessible to the general public, parts of it are “readily observable to members of the public who kayak or canoe on the Savannah and Little Rivers.”