I’m looking for experiences from others who have gone through the IRS conservation easement settlements.
I invested in syndicated conservation easements in 2018 and 2019. Like many investors, I relied on the offering materials, tax opinions, CPAs, and attorneys involved. Fast forward 7–8 years, and I’m now receiving the final IRS assessment.
Here’s what I’m struggling with.
I understand having to repay the tax if the deduction is ultimately disallowed. I don’t necessarily agree with it, but I understand the IRS’s position.
What I don’t understand is why I’m being charged 7–8 years of interest when the IRS took nearly that entire amount of time to notify me of the issue.
If they had audited me in 2020 or 2021 and said, “You owe this tax,” I would have paid it then. Instead, they waited until 2026, and now the interest has become one of the largest parts of the bill.
It seems like taxpayers are effectively financing the government’s administrative delays.
My questions are:
Has anyone successfully gotten IRS interest reduced or abated because of excessive administrative delay?
Has anyone’s attorney had success arguing that the IRS had everything it needed but simply didn’t act for years?
Is there any case law or IRS procedure that limits how long they can let interest continue to accrue while a case sits?
Has anyone hired a tax controversy attorney who was actually able to reduce the interest—not just negotiate a payment plan?
I know the IRS generally says interest is statutory, but there has to be some limit to what’s reasonable.
If the IRS can wait 8 years before sending a notice, what’s to stop them from waiting 15 or 20 years? At some point it feels like the government benefits from its own delay.
I’m genuinely interested in hearing from people who have actually gone through these settlements. Were you able to challenge the interest at all, or is it essentially a dead end?
I’d especially appreciate hearing from anyone whose partnership had long periods where the IRS appeared to have all the necessary information but the case simply sat without action.