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Preservation Group Seeks Guidance on Easement Donations

SEP. 27, 2019

Preservation Group Seeks Guidance on Easement Donations

DATED SEP. 27, 2019
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Sept. 27, 2019

Honorable David J. Kautter
Assistant Secretary for Tax Policy
US Department of the Treasury
1500 Pennsylvania Ave. NW
Washington, DC 20500

Re: Recognizing the Value and Validity of Preservation Easements

Dear Mr. Kautter,

As one of the nation's foremost local historic preservation organizations, Preservation Resource Center of New Orleans (PRC) accepts and stewards preservation easements because we have experienced firsthand the power of easements to preserve our cultural heritage for public benefit.

Easements held by PRC have protected historic structures, including from owners who wished to demolish them, when other policy tools proved insufficient. They have ensured the rehabilitation and appropriate maintenance of historic buildings across our city, generating significant economic activity in construction and cultural tourism.

We encourage the IRS, in its necessary and legitimate oversight role, to provide clear guidance for easement donors and discontinue auditing practices that result in unnecessary and costly delays.

Owners who donate easements to a federally-recognized 501(c)(3) nonprofit such as PRC, cede a measure of control over their historic property. The nonprofit retains that measure of control in perpetuity, even if a historic building changes hands. The federal government has long recognized the right of the property owner to take a tax deduction on the value of the development rights extinguished by an easement.

However, recent protracted and costly IRS audits have resulted in undue financial burdens for donors forced to retain legal counsel in the defense of their charitable contributions. Moreover, accounts of these costly and lengthy audits have a chilling effect on potential easement donors. In effect, these practices work at cross purposes to the goal of § 170(h) of the Internal Revenue Code: “preservation of an historically important land area or a certified historic structure.”

The U.S. Conference of Mayors has recently affirmed its support for preservation easements as legitimate donations in the public interest. Please act in your capacity to support this voluntary, non-regulatory preservation tool. Do not hesitate to contact me if we can provide any helpful information.

Sincerely,

Nathan Lott
Public Policy Research Director & Advocacy Coordinator
Preservation Resource Center of New Orleans
New Orleans, LA
504-581-7032, nlott@prcno.org

CC:
Steven Mnuchin, Secretary of the Treasury
Charles Rettig, IRS Commissioner
Michael J. Desmond,IRS Chief Counsel
U.S. Senator Bill Cassidy

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