Syndicated conservation easements (SCEs) have been under intense scrutiny by the Internal Revenue Service (IRS) for several years. These transactions, which involve groups of investors pooling resources to place a conservation easement on a property in exchange for a charitable tax deduction, have come under fire for potential abuses. The IRS has responded with a robust enforcement campaign aimed at disallowing these deductions in full and imposing significant penalties.

Since 2017, the IRS has audited nearly every SCE fund, disallowing the full amount of charitable contribution deductions claimed. These audits often result in proposed penalties ranging from 20% to 75% on any taxes owed due to the disallowed deductions, leading to numerous contested cases in the U.S. Tax Court and Federal District Courts.