IRS centralizes conservation easement administration
The IRS’ latest announcement, IR-2026-95, marks the next step in its evolving approach to syndicated conservation easement enforcement and settlement. The IRS has now concluded that sending standardized, unsolicited settlement letters on a rolling basis with fixed response deadlines is not the best way to address the variety of conservation easement and historic preservation easement cases.
The IRS pointed to the tax, valuation, contract and procedural issues that often arise in these cases. It also noted that a taxpayer’s partnership agreement, insurance coverage, where the case stands procedurally and other facts can affect how and when taxpayers evaluate resolution options. This is especially true in syndicated conservation easement cases, where partnership rules, investor approval rights, decision-making authority and insurance coverage can shape the path to settlement.
What the new office will do
The Office of Conservation Easements will centralize technical expertise and coordinate policy, enforcement and case-resolution strategy across the IRS and with the Office of Chief Counsel. The office is also expected to support engagement with taxpayers, practitioners, conservation and historic preservation organizations, and other stakeholders.
The IRS also stated that the office will work with the Treasury to evaluate administrative and legislative options that advance Congress’ conservation and historic preservation objectives, promote consistent tax administration and strengthen valuation integrity. In that respect, IR-2026-95 is not merely a settlement-process update. It signals a more formalized administrative structure for an area that has generated significant examination activity, litigation and policy attention.
How the settlement process changes
Effective Aug. 19, 2026, the current uniform settlement initiative terminates, and no additional uniform settlement letters under the May 13, 2026, program will be issued. Any previously issued settlement offers are withdrawn. However, elections to participate in the May 13, 2026, settlement framework made prior to Aug. 19, 2026, will remain effective and will be processed under their terms.
Taxpayers with pending cases may continue to request a settlement under the May 13, 2026, framework through their assigned IRS examination or Office of Chief Counsel representative. If the case remains eligible, the IRS will issue a new offer on the same standardized terms. The IRS also left open the possibility that individual cases may be resolved on different terms where warranted by the hazards of litigation.
Importantly, the IRS emphasized that this transition does not signal a new or more favorable standardized offer. Rather, the change ends the issuance of uniform offers and fixed deadlines. Taxpayers should continue working directly with their assigned IRS or Chief Counsel contacts on case-specific settlement requests and procedural questions.
Planning considerations for taxpayers
For taxpayers with pending conservation easement or historic preservation easement disputes, IR-2026-95 changes the process for pursuing a settlement but does not necessarily change the economics of the settlement. Taxpayers who previously received a May 13, 2026, settlement letter should confirm whether any election was made, whether the election remains effective and how withdrawn deadlines affect internal approvals, partner communications and funding arrangements.
Taxpayers with pending cases who did not receive or accept a prior offer should evaluate whether to request a settlement under the May 13, 2026, framework through their assigned IRS examination or Office of Chief Counsel representative. That analysis should include the case’s eligibility, where it stands procedurally, valuation evidence, litigation hazards, penalty exposure, partnership-level decision-making authority, investor communications and any insurance or indemnity arrangements that may affect settlement timing.
The creation of the Office of Conservation Easements may also affect how taxpayers engage with the IRS over time. Once operational, the office is expected to provide central coordination and a channel for general inquiries, with contact information to be announced separately. Until then, taxpayers should continue to direct case-specific matters to their assigned examination team or Chief Counsel representative.
