Wealthy Americans can claim tax deductions for preserving land.
The goal of the bill would be to protect valid uses of the deduction, such as family farms or ranches."[For] any CPA, there are very obvious indications that they should steer clear of these types of transactions and they should not recommend investors invest in them," she said.
In order to participate in these deals, individuals must have so-called accredited investor status. An accredited investor is defined as someone with at least $200,000 in earned income or a net worth of more than $1 million. The bill could help limit abuse of the technique and free up the IRS to focus on other issues, Faeth said.
The proposal has strong bipartisan support, she said, as it is a revenue generator. A previous estimate for another version of the bill by the Joint Committee on Taxation indicated it could produce $11.4 billion.on abuses of the deduction. The IRS urges people who have participated in an abusive syndicated conservation easement to work with an independent counsel in order to come into compliance.
"The vast majority of these transactions are legitimate and ethical for all the right reasons, but this handful of bad actors are abusing the incentive to help wealthy people become much, much wealthier," Faeth said.