In Uncategorized on 03/17/2022 at 15:36

Post-Hewitt-Oakbrook, maybe Judge Courtney D (“CD”) Jones is as confused as the rest of us. Reg. Section 1.170A-14(g)(6), the famous Extinguishment clause, caused Valley Park Ranch, LLC,  Reed Oppenheimer, Tax Matters Partner, Docket No. 12384-230, filed 3/17/22, to file a DJ in OK State Court to declare their 2016 conservation easement deed ambiguous and that their 2020 amended deed satisfied Federal and State law.

The Rogers County jurists found the amendment did the trick. Of course, as I’ve said many times, any lawyer who can’t find an ambiguity should find another way to make a living.

My readers will note IRS wasn’t a party to the OK DJ; so did IRS, and claims it isn’t bound. Due process 101 says you’re not bound by a judicial or administrative proceeding where you weren’t a party.

Judge CD Jones likes Judge Emin (“Eminent”) Toro’s well-reasoned Oakbrook concurrence as much as Judge Guy did in his concurrence in Oakbrook. That’s not Tax Court’s STJ Daniel (“Yuda”) Guy, btw, that’s 6 Cir’s Senior Judge Ralph B. (“Him Too”) Guy.

This deed had the prior-claims-out language, as well as proceeds-split-on-extinguishment-per-appraisal provision, not fixed-ratio-at-inception. It does not have in either iteration the much-contemned improvements-out language.

Howbeit, Judge CD Jones wonders if what was conveyed was an interest in real property (Section 170(h)(2)) and whether the deed satisfied the statutory (not regulatory) requirement of Section 170(h)(5) perpetuity.

Because of the Circuitry split, Judge Guy’s 6 Cir concurrence, Judge Toro’s Tax Court concurrence, and the fact that this case is appealable to 10 Cir,  Judge DC Jones says let’s forget the goofy regulation and brief the statute.

“After careful consideration of the parties’ motion papers, and in light of the uncertainty of the validity of Treas. Reg. §1.170A-14(g)(6)(ii), the Court finds that additional briefing is necessary, to address the deed’s satisfaction of the statutory requirements without regard to the regulation.” Order, at p. 9. (Emphasis by the Court).

Judge CD Jones should have ordered the parties each to buy an ale for Judge Holmes at Jake’s Saloon: “highly contestable readings of what it means to be perpetual”?  He got that right.


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