Claud has completed more than 200 Conservation/Historic Easement appraisals, including Kiva Dunes vs. Commissioner IRS. That case involved a $30,000,000 difference in opinions and the deduction was held up at greater than 95%. He is qualified to testify in U.S. Tax Court, U.S. Bankruptcy Court, Baldwin County and Mobile County Probate and Circuit Courts, and Mediation in Baldwin County.
IRS Audit History
I prepared the appraisal for establishing the value of the conservation easement. I substantiated that the value of the property before imposition of the conservation easement (the “before value”) was equal to $31,938,985, and that the value of the property after the imposition of the conservation easement (the “after value”) was $1,050,750.
The Tax Court opinion was favorable to the taxpayer and to the use of conservation easements generally. Specifically, the court found the taxpayer was entitled to a charitable deduction of $28,656,004, which was 93% of the deduction the taxpayer claimed on its income tax return.
The taxpayers claimed a deduction for placing a conservation easement on a ranch they owned in Wyoming. The deduction was used over two consecutive years. The IRS denied 100% of the deduction. Taxpayers filed suit in Federal Court. The IRS settled before going to Federal Court for 100% of the deduction for year one of the deduction. A year later the IRS conceded that 100% of the deduction for year two was allowed. I was deposed in the denial of the second year.
Alabama Proposed Subdivision
The IRS denied approximately 90% of the deduction. The case settled in appeals for 70% of the appraised value. One of the taxpayers had filed bankruptcy and not all of the deduction had been used. The taxpayers were facing penalties and interest. There were no penalties assessed. Taxpayer pleased with result. I was assessed an over valuation penalty that the settlement abated.
Taxpayer Litigation and Appeals Support
The IRS denied 90% of the original appraised value (original appraisal was not made by me). I made a new appraisal and the service settled for 80% of my appraised value. Taxpayer avoided penalties.
The IRS denied 75% of the original deduction. I did not make the original appraisal. My appraisal was 80% of the original value. The case settled at 81.25% of my appraised value.
In another case in which I did not make the original appraisal, the IRS settled at appeals with the taxpayer. My appraisal was made with a wall between the original appraisal (appraiser) and me. My appraisal was within 3% of the original appraisal. Settled at 70%.