A few years ago, a new form of fraud affected many people both across the US and specifically in Georgia. Conservation easement was, originally, a well-intended means to protect land and wildlife for future generations, provide tax reductions, lower property taxes, and offer state credits to those who wanted to limit land usage. While some conservation easements in Georgia were indeed charitable gifts meant to protect land and functioned as intended, a massive fraudulent system soon arose by bad actors manipulating the numbers for large tax write-offs. As a result, massive IRS audits and penalties have affected those who abused this system. Many individuals got involved, sometimes unwittingly. Let’s get into the complex history of the conservation easement tax deduction in Georgia, see how it quickly turned into fraud, and why it needs to be used sparingly.
What is a conservation easement?
A conservation easement is a legal agreement where a landowner commits to not developing their land with the goal of protecting the natural, historic, or scenic value for the public. As a result, individuals receive a tax deduction similar to a charitable donation.
A qualified conservation easement must pass a series of tests. For example, typically, the land must be donated for the preservation of one of the following:
- Benefits the Public: such as outdoor recreation or education
- Protects Natural Habitat: such as for species of local plants, fish, and wildlife
- Offers Scenic Enjoyment: such as public vistas and open spaces without development
- Preserves Historically Important Land: such as certified historic structures, battlegrounds, and historic homes
The land is meant to be conserved in perpetuity and not developed in the future. This means that the owner must protect and preserve the land, such as the water quality or historic site. A land trust typically holds and protects the interest of the easement. Currently, there are more than 220,000 easements on record in the US, according to the National Conservation Easement Database (NCED).
How did the practice become abusive?
In the early 2010s, an entire industry rose to manipulate individuals into raking in the conservation easement tax deduction, mostly using unrealistic property appraisals. In some cases, the property was not used to its purpose (i.e. the public good) and used instead as a tax shelter for a partnership or LLC.
This was complicated even further by syndicated conservation easements, which lured investors into buying property (usually as a member of a partnership) with the benefit of getting a massive tax write-off on their individual taxes. Sometimes, they boosted a 4 to 1 return on investment, meaning that small property fees would somehow magically turn into a massive tax deduction.
How has the IRS taken action against it?
Here are some examples of how the IRS has fought the fraudulent conservation easement practice:
- An Atlanta attorney has been sentenced to prison for the conservation easement tax scheme as recently as May 2025! It involved nearly $1.3 billion in fraudulent deductions, according to the DOJ.
- A CPA out of New Jersey has also been sentenced to 24 months in prison this year.
- As far back as 2016, the IRS issued named syndicated conservation easements as one of the “dirty dozen” tax scams, seeing an increases in enforcements in 2020.
- In 2020, a bipartisan group of lawmakers released a 151-page report exposing the practice.
- One of the biggest advocates against fraudulent conservation easements has been the Land Trust Alliance, which is a trade association that aims to protect land the traditional way.
On the whole, the IRS has clearly labeled this practice to be abusive. Individual taxpayers who used these partnerships may be liable for large sums of tax payments once a scheme is under audit. We highly recommend setting aside funds for these payments, especially if you are notified of an audit. Many high-net-worth individuals were preyed upon by fraudsters during the 2010s in Georgia.
What are the other arguments against conservation easement?
In addition to the heavy IRS scrutiny for the practice, there are other disadvantages to conservation easements, such as the following:
- They often need to be kept in perpetuity, but that can be unrealistic.
- In order to “do it right” or as intended, it may be costly to conserve the landscaping or historic site. For example, the owner may need to be cautious and aware of pollution of water and natural resources.
- The land may sometimes reduce in property value or affect neighbors’ value.
- They may lead to legal complexities in estates and inheritances.
- If a landowner sells to an entity with the expectation that it will be kept wild, the entity may have its own separate goals and mission statement.
- In the future, selling a home with a conservation easement on the property may get complicated.
Can you take your land out of a conservation easement?
Typically, one needs to take legal action in order to back out of a conservation easement, such as an extinguishment, a negotiation with the land owner, or some other transfer. Because land is supposed to remain available in perpetuity, especially if it serves a public benefit, some attorneys may recommend against “backing out.” That being said, the ability to remove it depends on the quality of the land, the nature of the partnership, and the nature of the restrictions.
How can you do it the “right way”?
Despite all of these drawbacks, some may still want to go about the process as intended: offering land in perpetuity for the public good, not for a large tax write-off. If that’s a path you’re interested in, we recommend a few resources:
