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Mayor Says IRS Overreach Hurts Historic Preservation Easements

JUL. 24, 2019

Mayor Says IRS Overreach Hurts Historic Preservation Easements

DATED JUL. 24, 2019
DOCUMENT ATTRIBUTES
  • Authors
    Benjamin, Stephen K
  • Subject Area/Tax Topics
  • Jurisdictions
  • Tax Analysts Document Number
    2019-32036
  • Tax Analysts Electronic Citation
    2019 TNTF 162-32
    2019 EOR 10-40
  • Magazine Citation
    The Exempt Organization Tax Review, Oct. 2019, p. 387
    84 Exempt Org. Tax Rev. 387 (2019)
    The Exempt Organization Tax Review, Oct. 2019, p. 387
    84 Exempt Org. Tax Rev. 387 (2019)
[Editor's Note:

For the entire letter, including an attachment, see the PDF version.

]

July 24, 2019

The Honorable Steven Mnuchin
Secretary of the Treasury
U.S. Department of the Treasury
1500 Pennsylvania Avenue NW
Washington, DC 20500

CC:
The Honorable David Kautter, Assistant Secretary for Tax Policy
The Honorable Charles Rettig, IRS Commissioner
Members of the U.S. Senate Finance Committee
Michael J. Desmond, Chief Counsel of the IRS
Assistant General Counsel in the Department of the Treasury

Dear Secretary Mnuchin,

Following on my letter of June 24th regarding the Federal Historic Preservation Easement program and ongoing detrimental action on the part of the IRS, I write to you to bring to your attention the U.S. Conference of Mayors' resolution passed during our 87th Annual Meeting in favor of this valuable preservation and economic growth program. I have attached herein the resolution In Support of the Historic Preservation Easement Under § 170(h) of the Internal Revenue Code as a Tool to Promote the Preservation and Rehabilitation of Historic Properties Through Tax Incentives.

I would ask for the opportunity to meet with your team to discuss this important program used in the redevelopment of our historic downtowns. The investment fostered by this program has served as a catalyst for projects brining about employment and economic activities to areas that have often been underserved or forgotten. The chilling effect of IRS overreach would be detrimental to ongoing and future investment.

I look forward to the opportunity to meet with your team on this matter. Members of the investment community as well as the development community will have important insight to share.

Sincerely,

Stephen K. Benjamin
Mayor
City of Columbia, South Carolina

Attachment:
Copy of the resolution In Support of the Historic Preservation Easement Under §170(h) of the Internal Revenue Code as a Tool to Promote the Preservation and Rehabilitation of Historic Properties Through Tax Incentives passed during our recently completed 87th Annual Conference.


THE UNITED STATES CONFERENCE OF MAYORS

RESOLUTIONS

87th Annual Meeting

In Support of the Historic Preservation Easement Under §170(h) of the Internal Revenue Code as a Tool to Promote the Preservation and Rehabilitation of Historic Properties Through Tax Incentives

WHEREAS, the United States Congress first introduced federal tax incentives ("the Program") for the preservation of historic properties in the Tax Reform Act of 1976, PL 94-445; and

WHEREAS, the tax incentives contained in the Tax Reform Act of 1976 ensured that the rehabilitation and preservation of historic buildings would be economically competitive with new construction; and

WHEREAS, the United States Congress made the Program permanent in the Tax Treatment Extension Act of 1980, PL 96-541; and

WHEREAS, the United States Congress has reaffirmed its commitment to the Program through multiple acts, including the Pension Protection Act of 2006, PL 109-280, the Food, Conservation and Energy Act of 2008, PL 110-246, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, PL 111-312, and the Protecting Americans from Tax Hikes of 2015, PL 114-113; and

WHEREAS, through these acts, the United States Congress has repeatedly expanded the Program and declined to advance bills that would end the Program; and

WHEREAS, The United States Conference of Mayors is committed to ensuring that the Program remains accessible to its constituents in accordance with the law; and

WHEREAS, mayors are on the front lines of ensuring economic, cultural, and infrastructure stability and have an affirmative obligation to respect socioeconomic balance for all constituents; and

WHEREAS, that significant, sustainable and, economically beneficial transformation of urban neighborhoods while preserving the historic character of the communities would not have occurred without the Program as has been demonstrated in numerous towns and cities across the United States; and

WHEREAS, states and local governments do not have control over federal laws and cannot enact legislation that matches the federal tax incentives of the Program; and

WHEREAS, local, state, and federal governments have a shared interest in promoting the preservation and rehabilitation of historic properties;

WHEREAS, despite the strong support for the Program from local communities, states, and the United States Congress, constituents are facing significant uncertainty over the future of the Program because of the hard line actions by the Internal Revenue Service and the Department of Justice,

WHEREAS, the threat of civil action by the Internal Revenue Service and the Department of Justice deters constituents from utilizing the Program, and constituents have voiced concern to members of the United States Conference of Mayors over their ability to continue to use the Program to preserve and rehabilitate historic properties in urban cores throughout the United States; and

WHEREAS, there has been a significant drop off in the use of the tax incentive tool as a result of the civil actions by the Internal Revenue Service and the Department of Justice;

NOW, THEREFORE, BE IT RESOLVED, that The United States Conference of Mayors recognizes and affirms the Program's promotion of the preservation and rehabilitation of historic properties, specifically through Historic Preservation Easements; and

BE IT FURTHER RESOLVED, that The United States Conference of Mayors urges the Internal Revenue Service and the Department of Justice to acknowledge the legality of the Program and its use by compliant taxpayers; and

BE IT FURTHER RESOLVED, that The United States Conference of Mayors urges the Internal Revenue Service and the Department of Justice to continue to monitor and pursue abuse in the program but allow responsible projects to move forward so as to not discourage the use of these programs in urban areas,

BE IT FURTHER RESOLVED, that members of The United States Conference of Mayors commit to uphold and promote their oath of office to represent their people and provide clear means to housing choice, business, and job creation as a means of increasing property values in urban areas, tax revenues, and overall meaningful growth, while maintaining the fabric of their community's historic character.

DOCUMENT ATTRIBUTES
  • Authors
    Benjamin, Stephen K
  • Subject Area/Tax Topics
  • Jurisdictions
  • Tax Analysts Document Number
    2019-32036
  • Tax Analysts Electronic Citation
    2019 TNTF 162-32
    2019 EOR 10-40
  • Magazine Citation
    The Exempt Organization Tax Review, Oct. 2019, p. 387
    84 Exempt Org. Tax Rev. 387 (2019)
    The Exempt Organization Tax Review, Oct. 2019, p. 387
    84 Exempt Org. Tax Rev. 387 (2019)
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