IRS Letter to the National Trust
Re: Easement Valuation; March 12, 2008

Click Here for IRS Audit Report

The IRS continues to challenge some easement donation deductions but a pattern is not yet discernable. In this climate of continuing uncertainty, we renew our advice to have your financial advisor or legal counsel review your charitable gifts. We believe that both the cash contribution and the easement donation you make to The L'Enfant Trust are deductible as gifts to a 501(c)(3) organization, subject only to the usual limitations on deductions for charitable gifts.

We remind you that fees paid for services you use to prepare your donation or to support the deduction for it are not deductible as a charitable contribution, though they may be deductible under other tax code provisions. Such fees would include appraisal fees, bank subordination fees, and any fees you pay for processing your paperwork.

Be aware that taking a charitable deduction for indirect fees may invite an audit. If an easement holding organization uses a portion of your cash contribution to pay a for-profit promoter or processor to complete your paperwork for you, the amount of that payment may not be taken as a charitable deduction. In all events, make sure the easement holding organization acknowledges in writing the cash value of the processing or other services it pays to third parties on your behalf.

President Signs Easement Reform Legislation Into Law
from the National Trust; October 2006