I live in an area where land trust nonprofits have grown significantly in size. One, in particular, is enormous in size and scope. These organizations lack transparency in many areas of their work. I understand that the IRS requires certain information from these nonprofits, but this varies by state. Unfortunately, I live in a state that gives land trust nonprofits lots of room to partake in shady tax shelter scams.
Many of us in the community would like to uncover suspected wrongdoings, but we don't know where to start. Any advice to help us get going with our investigative research would be very much appreciated.
The type of activity we're looking at are what are called "syndicated conservation easements (or restrictions)". Below is a brief description taken from this
page.
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Let’s say a man named John donates a conservation easement on his farm to a land trust. His appraiser valued the farm at $3 million before the easement and $2 million after the easement. Therefore, the easement is worth $1 million, which would be the amount of the tax deduction available for the donation. John doesn’t have sufficient income to use this deduction. He wants to sell the deduction to someone who can use it.
Federal tax law does not allow the donor of a conservation easement, or of any other property for that matter, to transfer the deduction generated by the donation to someone else. A federal tax deduction is personal to the donor. If the donor can use the deduction, fine; if not, it disappears. In other words, John can’t sell his deduction. [He can, however, if he creates an LLC]
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