In Uncategorized on 02/27/2019 at 13:49

The Section 170(h) regs, specifically Reg. 1.170A-14(g)(6)(ii), the split-the-proceeds-if-the-easement-craters variation on the “joy forever” rule, is getting hammered in Oakbrook Land Holdings, LLC, William Duane Horton, Tax Matters Partner, 5444-13, filed 23/27/19.

It seems Billy D and the Oakbrooks claim the reg is invalid, because apparently IRS skipped a couple steps (note this is Judge Holmes’ order, so a dissed partitive genitive or two is de rigueur) when first they put it forth.

But first there’s the Case of the Missing Comments.

“It appears to be the first case in which there is a possible challenge to the validity of 26 C.F.R. §1.170A-14(g)(6)(ii). The Court has recently become aware that there may have been comments submitted to the Treasury Department during the course of considering this regulation, but its attempts to find the text of those comments using normal legal research resources have failed.” Order, at p. 1.

It seems that the Notice of Proposed Rulemaking that kicked off this reg, found in 48 Fed. Reg. 22940-01 (May 23, 1983), can’t be found online, not from Cornell, the Federal Register site, nor yet from Library of Congress’ website. And where these public comments might be, and what they might say, if anything to the point, can only be produced by IRS.

So IRS, go fetch, and when produced, both sides write fifteen (count ‘em, fifteen) but no more, pages saying what they have to do with this case.

In any case, thereafter the parties each have a shot at a twenty (count ‘em, twenty) page memo “to analyze whether the donor’s reserved right to make improvements in the conservation area created by the deed in this case is distinguishable from the similar rights reserved in the deeds at issue in Pine Mountain Preserve, LLLP v. Commissioner, 151 T.C. No. 14 (Dec. 27, 2018).” Order, at p. 2.

Y’all remember Pine Mountain, no? If not, check out my blogpost “Perpetually Swiss,” 12/27/18 BS (Before Shutdown).

Sounds like whether the divvy of the boodle at crater regs are valid won’t decide the case if Judge Holmes decides the Oakbrooks cut the cheese.



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