The Internal Revenue Service has stood up a new Office of Conservation Easements, a dedicated unit whose job is to centralise policy, enforcement and case-resolution strategy for the syndicated easement disputes that have jammed the U.S. Tax Court for nearly a decade. The office, announced by the IRS on August 19, 2026 and led by a former Trump administration adviser, is charged with working through the roughly 1,000 pending cases one by one rather than through the blanket settlement offer the agency extended earlier in the year, according to a Treasury and IRS enforcement update summarised by tax counsel at JD Supra.
That is a sharp turn. For years, the IRS treated syndicated easements as a category to be crushed, wholesale, through litigation and pattern settlements. The new office says: sort them.
What the office actually is
The Office of Conservation Easements sits inside the IRS’s compliance operation and is designed as a single desk for everything easement-related: audit posture, litigation strategy, settlement terms, and the technical valuation questions that decide most of these cases. It replaces a scattered arrangement in which examinations, Office of Chief Counsel litigators, and Appeals officers were each running on their own tracks, sometimes taking inconsistent positions on identical facts.
Practitioners tracking the announcement say the centralisation is the point. In a briefing on how the agency is reworking its approach to conservation and historic-preservation easement disputes, lawyers noted that the office is expected to standardise how the IRS talks to taxpayers about resolution — with the same people setting terms across hundreds of dockets instead of dozens of examiners doing it piecemeal.
Leadership matters here too. Bloomberg Tax reported that Dan Huff, a former legal adviser to President Trump, is leading the new office, which had fewer than ten subject-matter experts on staff as of late August, according to IRS chief tax compliance officer Jarod Koopman. That reporting is available in Bloomberg Tax’s coverage of the IRS’s compliance strategy.
Why the backlog is so large
Syndicated conservation easements are the reason the docket is crowded. In a typical deal, a promoter buys or options rural land, brings in outside investors, and then donates a conservation easement — a permanent restriction on developing the property — to a qualified land trust. Investors claim a charitable deduction based on the appraised value of the foregone development rights.
The problem is what “appraised value” came to mean. In the aggressive versions of these deals, appraisers valued rural timberland as if it were about to become a limestone quarry, a subdivision, or a resort. Deductions often reached several times what investors had put in. In the past two years, as CNBC reported in its Inside Wealth column, the Tax Court has sharply reduced claimed deductions that rested on speculative development scenarios.
Legislative changes have effectively shut down the market for new transactions. But the deals done before are still working their way through examinations, appeals and trials. More than 1,100 cases remain in the pipeline — roughly 740 of them docketed in the Tax Court and the rest still in IRS examination — some involving hundreds of investor partners each.
The pivot from blanket settlement
Earlier in 2026, the IRS tried to clear the backlog the fast way: a standardised settlement offer sent to hundreds of partnerships at once. Take the deal, concede the deduction, pay a reduced penalty, move on.
Uptake was limited. Many partnerships had already spent years and millions of dollars building expert valuation cases; a flat concession made little sense to them. Others believed shifts in Tax Court reasoning — particularly the court’s growing focus on valuation methodology rather than technical deed defects — gave them room to argue for a smaller adjustment rather than a total disallowance.
The new office reflects that reality. Rather than push a one-size settlement, the IRS now says it will resolve the cases individually. Coverage in the Journal of Accountancy’s tax practice and procedure section frames the shift as an acknowledgement that the docket is too varied — different land types, different appraisers, different deed language — for a blanket approach to work.
What the Tax Court has been doing in the meantime
While the IRS has been reorganising, the Tax Court has been quietly rewriting the terrain. Observers have noted that recent cases have centred on what the foregone development rights are actually worth, rather than on technical defects in the paperwork — the ground on which many earlier IRS wins were built.
That shift matters. A case decided on a missing signature or a defective baseline report is a total loss for the taxpayer. A case decided on valuation is a negotiation: the deduction shrinks, but rarely to zero.
Even losing partnerships have started to find angles. As Bloomberg Tax has reported, some lawyers see room to salvage partial deductions and cap penalties even after adverse rulings, using the Tax Court’s valuation-focused framework as a negotiating baseline with the new office.
Four factors that will decide whether the office works
The trade press has already started scoring the office’s prospects. A Law360 analysis identified staffing, technical expertise, consistency of settlement terms, and the ability to move cases quickly as the four factors most likely to decide whether the new unit succeeds.
Staffing is the immediate constraint. The IRS has faced challenges retaining experienced valuation specialists and easement litigators in recent years. Building a bench that can look at a 60-page appraisal of Appalachian timberland and know within an hour whether the discounted-cash-flow assumptions are defensible is not a hiring cycle you finish in a quarter.
Consistency is the second. If partnership A settles at 30 cents on the dollar and partnership B — with a materially identical fact pattern — is pushed to trial and loses everything, the office will face immediate pressure from the tax bar and eventually from courts asking why similarly situated taxpayers are being treated differently.
Shawn O’Brien, a tax partner at McDermott Will & Emery, told Thomson Reuters’ Checkpoint News that the agency should use the transition to settle cases more efficiently and communicate better with taxpayers, noting that delays that can leave partnerships waiting up to two years for a final bill — while interest accrues — are a problem the office should address.
The legitimate easements caught in the middle
Not every conservation easement is a syndicated deal. Most, by number, are not. Ranchers, farmers and family landowners have used the deduction since the early 1980s to keep working land intact — often selling the easement at a discount to a land trust and taking a charitable deduction for the difference between sale price and fair market value.
Ranching clients in some cases use the proceeds to pay off debt or buy out family members who do not want to keep ranching. A well-documented easement done today carries less audit risk than one done a decade ago — partly because the syndicated deals have absorbed most of the enforcement oxygen.
The Land Trust Alliance and its member trusts have spent years trying to separate their work from the syndicated market. The new office, in theory, helps: a specialised unit is better positioned to distinguish an Alabama quarry fantasy from a genuine easement over a family cattle ranch than a general examiner working easements between unrelated audits.
What comes next
The office is expected to begin issuing case-by-case resolution offers within the next several months. Practitioners are watching for three signals: whether penalty terms will vary based on the strength of the underlying appraisal, whether the office will accept partial deductions rather than insist on total disallowance, and whether it will coordinate with the Office of Chief Counsel to withdraw or narrow positions in cases already in litigation.
Congress, meanwhile, is moving in the other direction on legitimate easements. House and Senate farm bill proposals would create a new federal program to pay landowners to keep forests intact — a cash-payment model that sidesteps the deduction machinery entirely. If it passes, some of the family-scale conservation work that has historically run through the tax code may migrate to a direct-payment program, leaving the deduction more narrowly focused on the donation cases it was originally designed for.
The docket the office inherits was built during a specific window: roughly 2010 through the early 2020s, when syndicated promoters raised billions and the IRS was too thin to keep up. Every case in that stack represents land somewhere — a pine plantation in south Georgia, a hardwood tract in Tennessee, a stretch of Louisiana bottomland — that is now permanently restricted from development regardless of how the tax fight ends. The easements are real. The deed is recorded. What the new office is really deciding is who pays for the paper.
