IRS Asks Court to Hold Easement Appraisals Were Not Qualified

GREEN VALLEY INVESTORS, LLC, BOBBY A. BRANCH, TAX MATTERS PARTNER, ET AL.,
Petitioners,
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent.

UNITED STATES TAX COURT

Judge Weiler

RESPONDENT'S MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING QUALIFIED APPRAISALS

RESPONDENT MOVES, pursuant to the provisions of Tax Court Rule 121, for summary judgment in respondent's favor on the issue of whether the appraisal documents at issue in these consolidated cases (“the V&W Appraisals”), which value properties that the documents acknowledge, on their face, do not exist as of the donation date are qualified appraisals under Internal Revenue Code section 170(f) and the regulations thereunder. There is no genuine material factual dispute that the V&W Appraisals do not provide the fair market value for the properties contributed and do not comply with generally accepted appraisal standards.

Respondent is concurrently filing a Memorandum of Facts and Law in Support of Respondent's Motion for Partial Summary Judgment Regarding Qualified Appraisals (“Memorandum”), which details the facts and law showing why this motion should be granted.

IN SUPPORT THEREOF, respondent respectfully states:

1. The pleadings in the consolidated cases were closed on the following dates:

2. On November 10, 2020, the Court consolidated for trial (among other purposes) the cases set forth in paragraph 1.

3. This motion is being made at least 30 days after the date that the pleadings in this case closed, more than 60 days before the date on which these cases will be calendared for trial, and within such time as not to delay the trial. Tax Court Rule 121(a).

4. The above-captioned cases are syndicated conservation easement cases, as described in Notice 2017-10, 2017-4 I.R.B. 544, involving disallowed deductions for charitable conservation easement donation claimed on the LLCs'¹ Forms 1065 U.S. Return of Partnership Income (“Form 1065”).

5. To support their claimed deductions, the LLCs each included with their Form 1065 an appraisal document prepared by Messrs. Van Sant and Wingard.

6. The V&W Appraisals claimed that the pre-easement value of each of the four properties at issue was more than eighty times higher than what Messrs. Van Sant and Wingard had valued the same properties (plus additional acreage) as being worth the year before.

7. The V&W Appraisals reached these values by treating indisputably vacant parcels of land as if the parcels were existing mining operations.

8. For reasons set forth in the Memorandum of Law filed concurrently herewith, respondent now seeks summary adjudication that, as a matter of law, the “V&W Appraisals” are not qualified appraisals and that consequently, if the amount determined to be the correct value of the donated easements is at least 150% of the value claimed on the LLCs' Forms 1065, the reasonable cause exception under section 6664(c)(3) does not apply.

9. In support of this motion, respondent relies upon (1) the pleadings, (2) the documents (Ex. A1-28) described in, and attached to, respondent's previously filed Motions for Partial Summary Judgment and Respondent's Objection to Petitioner's Motion for Partial Summary Judgment on Qualified Appraisals,² and (3) the Fourth Declaration of Emily J. Giometti (Attachment A) and attached exhibits included with the instant motion.

10. Respondent respectfully states that counsel of record has reviewed the administrative file and, on the basis of the review of the file and the pleadings, concludes that there remains no genuine issue of material fact for trial as to the question put before the Court herein. As a matter of law, the V&W Appraisals are not qualified appraisals.

11. Petitioner objects to the granting of respondent's motion.

WHEREFORE, it is prayed that respondent's motion be granted.

DRITA TONUZI
Deputy Chief Counsel (Operations)
Internal Revenue Service

Date: 04/05/22

By: EMILY J. GIOMETTI
Special Trial Attorney
(Large Business & International)
Tax Court Bar No. GE0326
JW Peck Federal Building
550 Main Street, Suite 9-351
Cincinnati, OH 45202-2727
Telephone: (513) 975-6847
emily.j.giometti@irscounsel.treas.gov

OF COUNSEL:
ROBIN GREENHOUSE
Division Counsel
(Large Business & International)
JOHN M. ALTMAN
National Strategic Litigation Counsel
(Large Business & International)
TRAVIS T. VANCE
Strategic Litigation Counsel
(Large Business & International)