Sponsor
Mike Carey
Representative · R-OH
Representative · R-OH
The bill creates a faster, administratively simpler path to resolve disputed conservation-easement cases and clarifies historic-district tax eligibility, but does so by requiring potentially large, irrevocable settlements and imposing joint liabilities with limited judicial review while also expanding tax benefits that may reduce federal revenue.
Partnerships with disputed conservation-easement deductions can resolve liabilities quickly by making a one-time settlement election that closes the dispute.
For electing cases, IRS review of substantive issues (like fair market value) is limited to computational verification, simplifying administration and reducing prolonged substantive disputes.
Electing partnerships who remit amounts by the election deadline have interest on prior periods waived, lowering the cost to timely payers.
Non-contributing partners can be held jointly and severally liable and face accelerated collection with limited pre-payment contest rights, exposing them to substantial unexpected tax and penalties.
The election is irrevocable and largely not subject to judicial review, restricting partners' ability to contest valuation or substantive tax treatment after electing.
Partnerships must pay a potentially large settlement up front to make the election, increasing immediate cash costs for partners and possibly creating liquidity strains.
Based on analysis of 3 sections of legislative text.
Creates a voluntary partnership election to resolve certain conservation-easement disputes and replaces a Secretary certification test with a 'contributing building' standard for conservation and rehab tax benefits.
Official title: To provide an election to resolve certain open partnership controversies involving donations of conservation easements.
Introduced June 23, 2026 by Mike Carey · Last progress June 23, 2026
Creates an elective process allowing partnerships to resolve certain open IRS disputes about partnership-reported conservation easement charitable deductions for partnership years ending on or before December 31, 2024, and changes how historic-district buildings are treated for conservation and rehabilitation tax benefits. It replaces a Secretary-of-the-Interior certification requirement with a defined “contributing building” standard for certain conservation contribution and historic rehabilitation credit rules, and limits retroactive application to cases or years that remain open. The bill defines who may participate in the election, how reported Schedule K–1 amounts can be relied on, what qualifies as an “open matter,” and when related partnerships form a common marketing group. It sets an election window and preserves IRS adjustment rights while aiming to provide certainty for partnerships, donors, charities, and taxpayers engaged in conservation easement transactions and historic rehabilitation claims.