Regarding IRS' Safe Harbor Opportunity to Amend CRs
May 31, 2023
As reported in recent editions of MLTC's eNews, the IRS is offering a limited window until July 24th to record amendments to existing CRs to avoid potential future penalties related to two provisions of conservation restrictions -- specifically those related to extinguishment and boundary line adjustment. Background on the issue is summarized here.
While the obligation to review and respond to this opportunity lies with CR donors and their tax advisors, land trusts and conservation attorneys may find themselves in the position of needing to provide a timely response to those who may wish to do so.
In Massachusetts, any CR amendment requires a state signature before it can be recorded. To maximize chances of securing a state signature in time to meet the IRS deadline, please review and follow guidance that the Division of Conservation Services (DCS) at the Executive Office of Energy and Environmental Affairs published on its website this week. Included is a template of recommended language and guidance of what materials they require in order to complete expedited review.
Note that this guidance pertains only to amendments related to the two specific issues covered by the IRS Safe Harbor provision. Amendments related to any other aspect of a CR must follow standard DCS procedures.