Landowners can sue over easements' value
By Jerd Smith, Rocky Mountain News
Published August 12, 2008 at 12:05 a.m.
SWINK -- Hundreds of landowners embroiled in the Colorado conservation easement scandal may sue the Colorado Department of Revenue and the IRS in federal court in an effort to reclaim hundreds of thousands of dollars in lost land values.
"If we band together, we can't lose," said John Rose, an easement holder in the Lower Arkansas Valley.
Rose and more than 50 landowners met Monday evening to determine what legal options they have to resurrect the value of conservation easements whose value has been ruled "zero" by the IRS or the Colorado Department of Revenue. More than 3,000 easements are now in place on Colorado lands. How many have been done fraudulently and how many were simply done improperly isn't clear yet.
But as investigations into the program continue, landowners who believe they complied with the law want the state and the IRS to honor the value of their easements so that they can claim some of the financial benefits the state promised when it enacted the program in 2000.
John Ellsworth, a federal tax expert, said landowners who acted on the advice of state licensed appraisers and attorneys should have some recourse in federal court.
At issue is an innovative Colorado open space program that allows private landowners to put environmentally important land under protective easements. Easements are legal tools that prohibit development while allowing landowners to maintain ownership.
In exchange for giving up development rights, landowners receive state income tax credits that can be sold for cash. Nonprofit land trusts agree to hold the easements and sign off on the tax credits.
More than $274 million in state income tax credits have been claimed, far more than the state initially planned.
But a series of investigations have revealed serious flaws with the eight-year-old program: Millions of dollars in tax credits had been claimed on lands whose appraised values were grossly inflated, including dozens here in the Lower Arkansas Valley. Other credits were claimed for lands in pricey subdivisions and on lands that allow oil and gas development.
Now the state is seeking millions of dollars in repayment on questionable deals and Colorado Attorney General John Suthers has launched a grand jury investigation of several land trusts, appraisers and attorneys who structured questionable deals.
J.D. Wright, a landowner whose tax credits have been deemed of zero value, said landowners have no choice but to band together and proceed to federal court.
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August 12, 2008
1:28 a.m.
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SL10 writes:
Wow! Our tax money down the drain. How sweet. Not!
August 12, 2008
9:58 a.m.
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Roni writes:
It was only a matter of time, before the fallacy of CE's was exposed.
Some including Lynn Sherrod and Jay Fletcher (of CCALT) did some pretty ugly things to individuals who tried to bring out the truth on CE's.