Policy Update

IRS Amends Notice 2017-10 Relating to Syndicated Partnerships

The IRS has now officially modified Notice 2017-10. Notice 2017-10, which was released on December 23, 2016, had the primary purpose of designating certain syndicated conservation easement transactions as being “listed transactions.” This designation retroactively imposed additional reporting requirements on landowners and others who participated in these syndicated conservation easement transactions.

Late yesterday afternoon, however, the IRS released Notice 2017-29. Notice 2017-29 amended Notice 2017-10 in two important ways.

First, Notice 2017-29 extended the deadline to report involvement in syndicated conservation easement transactions from June 21, 2017 to October 2, 2017. This extension applies only to those who participated in a syndicated conservation easement transaction between January 1, 2010 and December 22, 2016. The reporting deadline for those who filed a tax return or made a tax statement relating to a syndicated conservation easement transaction on or after December 23, 2016 remains unchanged.

Secondly, Notice 2017-29 also clarified that “a donee described in § 170(c)”—i.e., a land trust—“is not treated as a material advisor under § 6111.” This is important because there had been some speculation that Notice 2017-10 might require land trusts to report their involvement in syndicated conservation easement transactions by virtue of being “material advisors” for these transactions even though Notice 2017-10 had stated that land trusts were not considered to be “parties” to or “participants” in these transactions. Land trusts that might have participated in such transactions can now rest a little easier.

The IRS’s attack on syndicated partnerships is only beginning. Stay tuned.

Published by

Derrick P. Fellows

Derrick P. Fellows is an attorney with Hawthorne & Hawthorne, P.C. in Victoria, Virginia. Follow him on Twitter at @dpfellows.