The Internal Revenue Service (IRS) has been accused of conducting a "witch hunt" against taxpayers who utilized conservation easements, a tax incentive program established decades ago to encourage land preservation. Critics contend that the agency unilaterally changed the rules in 2016, retroactively branding a broad category of these transactions as "listed transactions" and presumptively abusive without congressional approval or public comment.
This shift, detailed in IRS Notice 2017-10, has led to an aggressive enforcement campaign that has placed over 1,100 syndicated conservation-easement disputes into audits and litigation, with approximately 740 cases currently in U.S. Tax Court and about 400 still under examination as of May 2026. The IRS did not make the laws; Congress did. The conservation easement deduction has been part of the tax code since 1976 and was made permanent in 1980, with the IRS originally creating the program via a revenue ruling to protect nature and save working lands.
Landowners were permitted to donate easements in exchange for a tax write-off, a policy that has resulted in the conservation of tens of millions of acres. However, critics argue that the IRS, by issuing Notice 2017-10, effectively changed tax law after the fact, which is generally permissible only in criminal and penal cases, not civil revenue measures. The agency then reportedly increased audit rates for these transactions to 100%.
While a bipartisan Senate Finance Committee investigation did identify abuses in some syndicated conservation-easement transactions, such as inflated land valuations, the IRS's approach has been criticized for presuming all participants acted fraudulently or knowingly engaged in tax shelters. The agency is accused of harassing law-abiding taxpayers, pressuring them into unfair settlement agreements, and forcing some into bankruptcy, despite their adherence to the law as written.
This aggressive stance reportedly continued during the Biden administration, which provided the IRS with increased funding and personnel to expand its enforcement capacity. The IRS itself has faced scrutiny; a Treasury Inspector General report in May 2026 found seven cases involving backdated penalty-approval documents, leading the IRS to concede over $68 million in penalties in those instances.
Proponents of the conservation easement program are calling for Congress to amend tax laws to prohibit such after-the-fact tax changes, restore trust and fairness to the tax code, and for the IRS to end its current enforcement campaign against taxpayers who participated in these programs based on decades of established policy. The situation has been described as "weaponization at its worst" and "un-American."