Report: Colo. conservation deals flawed
DENVER, Colorado ” Nearly 90 percent of conservation easements that have been reviewed by state and federal tax officials had problems that could mean landowners owe back taxes, according to the Internal Revenue Service.
IRS Acting Commissioner Kevin Brown wrote a letter to Sen. Wayne Allard, R-Colo., in August indicating that 96 out of 108 cases reviewed showed problems, The Denver Post reported Thursday.
An additional 182 cases were still under review when Brown sent the letter to Allard. It wasn’t immediately clear if any of those cases have since been closed.
The inquiry is expected to be finished by early next year.
Tax officials began investigating the easements after conservation groups raised questions about easement values that appeared inflated, Allard spokeswoman Tara Hendershott said.
Conservation easements allows farmers, ranchers and other landowners to reap tax benefits in exchange for promising to not develop a portion of their land. That helps maintain habitat for deer, elk and other wildlife along with scenic vistas across the state.
Last week, state officials issued about 30 subpoenas to people involved in easement deals. The Post reported they involved five ranches, all through an Arvada-based land trust.
Use of the program has jumped from $2.3 million in state tax credits in 2001 to $85.1 million last year, fueled in part by a change in 2003 that allowed the credits to be transferred and sold.
Under state law, property owners who don’t have enough income to benefit from the $100,000 to $375,000 conservation easement tax benefit can sell that credit to a land trust or other charitable group in what is an unregulated security under Colorado law, state Securities Commissioner Fred Joseph said.
Statewide, about 1,500 conservation easements protect some 1.2 million acres.
The Denver Post, http://www.denverpost.com/
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