Another Attack on Conservation Easements

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Jason B. Freeman

Jason B. Freeman

Managing Member


Mr. Freeman is the founding member of Freeman Law, PLLC. He is a dual-credentialed attorney-CPA, author, law professor, and trial attorney.

Mr. Freeman has been named by Chambers & Partners as among the leading tax and litigation attorneys in the United States and to U.S. News and World Report’s Best Lawyers in America list. He is a former recipient of the American Bar Association’s “On the Rise – Top 40 Young Lawyers” in America award. Mr. Freeman was named the “Leading Tax Controversy Litigation Attorney of the Year” for the State of Texas for 2019 and 2020 by AI.

Mr. Freeman has been recognized multiple times by D Magazine, a D Magazine Partner service, as one of the Best Lawyers in Dallas, and as a Super Lawyer by Super Lawyers, a Thomson Reuters service. He has previously been recognized by Super Lawyers as a Top 100 Up-And-Coming Attorney in Texas.

Mr. Freeman currently serves as the chairman of the Texas Society of CPAs (TXCPA). He is a former chairman of the Dallas Society of CPAs (TXCPA-Dallas). Mr. Freeman also served multiple terms as the President of the North Texas chapter of the American Academy of Attorney-CPAs. He has been previously recognized as the Young CPA of the Year in the State of Texas (an award given to only one CPA in the state of Texas under 40).

Lumpkin HC, LLC v. Comm’r, T.C. Memo. 2020-95 | June 23, 2020 | Kerrigan, J. | Dkt. No. 192-18

Short Summary

Lumpkin HC, LLC (Lumpkin HC) conveyed a deed of easement on most of the property to the Atlantic Coast Conservancy, Inc. (ACC), a Georgia nonprofit corporation. ACC was a “qualified organization” for purposes of section 170(h)(3). Lumpkin HC claimed an $8,242,000 charitable contribution deduction for its contribution of the conservation easement to ACC on its 2012 Form 1065, U.S. Return of Partnership Income. Lumpkin HC attached Form 8283, Noncash Charitable Contributions, to its partnership return and stated that its adjusted tax basis in the property at the time of donation was $458,502.

The IRS issued a notice of final partnership administrative adjustment (FPAA) for tax year 2012 to Hurricane Creek Partners, LLC, as tax matters partner for Lumpkin HC.  In the FPAA, respondent disallowed a $8,242,000 deduction for a noncash charitable contribution and asserted a gross valuation misstatement penalty pursuant to section 6662(h), or in the alternative, a penalty pursuant to section 6662(h).

Key Issues:

Primary Holdings

Key Points of Law:

InsightLumpkin serves as yet another Tax Court case holding taxpayers to the letter of the law in the context of charitable deductions for conservation easement contributions.  The case also illustrates the so-called Chevron doctrine—the two-step process through which courts analyze the validity of administrative regulations.  That doctrine tends to be deferential to the federal agency.

Representation in Tax Audits & Appeals

If you need assistance in managing the audit process, Freeman Law can help taxpayers navigate state tax laws.  We offer value-driven services and provide practical solutions to complex issues. Schedule a consultation or call (214) 984-3410 to discuss our tax representation services.