Partnerships and others under attack by the IRS as part of its “compliance campaign” against conservation easement and substantially similar transactions need to be aware of relevant Chief Counsel directives and implement appropriate defense strategies from the very start of the audit process.

This article summarizes conservation easement donations and related tax deductions, identifies the parties that the IRS is now pursuing, explains the non-disclosure rules and applicable exceptions, unpacks three IRS pronouncements attempting to justify potential violations of taxpayer protections and evidentiary rules, and reminds partnerships and others affiliated with SCETs and SSTs of the importance of understanding the IRS’s strategies and implanting processes to defend against them from the outset.