Colorado lawmakers promise crackdown on conservation easements |

Colorado lawmakers promise crackdown on conservation easements

Steven K. Paulson
The Associated Press
Aspen, CO Colorado

DENVER ” Colorado lawmakers vowed to crack down on landowners who abuse conservation easements Tuesday after acknowledging that poor oversight allowed conservation tax breaks for back yards and golf courses.

“Those days are over,” said Rep. Alice Madden, D-Boulder.

“We know the bad actors have been out there for a while. I think it’s really the last nail in the coffin for people who are defrauding the state, defrauding the taxpayer,” she said.

Madden introduced House Bill 1353 requiring state officials to review any proposed easements. It also would require education and experience requirements for appraisers who handle conservation easement.

The easements guarantee that land will not be developed. Property owners can write off easements as a charitable contributions, and they get to keep the land.

Use of the program has jumped from $2.3 million in state tax credits in 2001 to $85.1 million in 2006, fueled in part by a change in 2003 that allowed the credits to be transferred and sold.

Officials said things got so far out of control they had to ask the IRS to audit people who claimed credits to which they were not entitled. IRS Acting Commissioner Kevin Brown wrote a letter to Sen. Wayne Allard, R-Colo., in August indicating that 96 out of 108 cases reviewed showed problems.

Madden said the IRS is auditing 290 Colorado conservation easements for possible improprieties, but she believes only 90 of the allegations are justified.

She said a state tax break could still be claimed in the other cases, even if the IRS rules the federal claims were invalid.

She said the state wants to help separate valid easements from the questionable ones.

“The (Colorado) Department of Revenue, frankly, over the past couple of years dropped the ball on this. They threw up their hands and called in the IRS, which is now completely overreacting,” she said.

Stan Irby, who owns a ranch east of Gunnison that has been in his family for four generations since the time of Chief Ouray, said his family needed the tax credits to help preserve his ranch. He signed two conservation agreements, agreeing to set aside 653 acres.

Irby told lawmakers it was a gut-wrenching decision.

“One of the first things that you weigh is whether you’re willing to set aside something in perpetuity that your family will have to live with for generations to come, whether it devalues your property or whether it restricts your ability to sell it,” he told lawmakers.

“My family has been ranching long enough and we were in a position we felt this was the next logical step. We wanted to protect this piece of ground,” he told the House Finance Committee.

The committee took no action on the bill Tuesday.