Judge Holmes’ famous dictum in Oakbrook is really getting a workout. IRS is seeking summary J knocking out charitable land deals with “very contestable readings” (Oakbrook Land Holdings, LLC v. Comm’r, 154 T.C. No. 10 (U.S.T.C. May. 12, 2020), at p. 127) of the Section 170 Regulations. And Judge Emin (“Eminent”) Toro is not buying IRS’ grasping at straws in Elgin 78, LLC, Suzanne Foster 2004 Revocable Trust, Tax Matters Partner, Docket No. 26892-21, filed 1/26/24.

It’s an outright fee donation, not an easement, but IRS’ attack is straight out of the conservation dodge playbook.

First, the description of the property donated. “Respondent points out that a letter from the Lutheran Church-Missouri Synod Foundation to Elgin 78 acknowledging receipt of the donated property appears to describe the property differently from the appraisal. Specifically, respondent highlights that the letter explicitly excludes from the donated property a 70 by 130 feet parcel of land at the southwest corner of Lot 8, while the Appraisal does not make clear whether that parcel is part of the donated property.” Order, at p. 2. But the maps attached to the appraisal seem to show the excluded property was excluded, and the Elgins get the favorable inference.

Second, the appraisal doesn’t state the expected date of the donation. So what, says Judge Eminent; the Form 8283 states the actual date, and the appraisal is no older than 30 (count ’em, 30) days before, so Reg. Section § l.170A-13(c)(3)(ii)(C) is satisfied thereby. Substantial compliance, y’know.

Third is because 1 and 2 above, the appraisal doesn’t state FMV of donated property.  Because 1 and 2 above, IRS loses.

Finally, all three (count ’em, three) appraisers didn’t sign the Form 8283. Reg. Section § 1.170A-13(c)(5)(iii) requires all appraisers to sign, and they all signed the appraisal itself. IRS doesn’t say how that doesn’t satisfy the Reg.

Was it Einstein who said that doing the same thing and expecting a different result is insanity?