Another Gross Overvaluation Conservation Easement Claim Fails (5/6/26)

In Kimberly Road Fulton 25, LLC v. Commissioner, T.C. Memo. 2026-36 (5/4/26), Case # 2026-36 here at #178 and GS here [to come], the Court (Judge Holmes) shot down another bullshit syndicated conservation easement (“SCE”). As is common, the bullshit was in the gross overvaluation. So, not only do the partnerships (and their partners) in the consolidated cases lose, but they suffer the 40% 6662(h) gross valuation misstatement penalties. On the penalties, the Court’s analysis driven by its holding of a gross overvaluation is short (p.39, footnote omitted):

VI. Penalties

          The FPAAs determined the applicability of section 6662(h) gross-valuation misstatement penalties. This penalty applies if the value of property claimed on a return is 200% or more of the amount determined to be the correct value. It’s a 40% penalty, and there’s no reasonable cause defense. I.R.C. § 6664(c)(3). This is a math question, and it is a math question that we must find the Commissioner got right. The parties stipulated that the Commissioner complied with the supervisory-approval requirement of section 6751(b)(1) in asserting these penalties, and we therefore uphold them. 

Because its material facts are many and duplicative of patterns in earlier bullshit SCE cases, the only thing that makes this opinion worth reading is its opening (Slip Op. 1-2) which anticipates the conclusions I summarized above:

Jeffrey Grant’s grandfather taught him a saying that has stuck with him all his life: “Sometimes, a fast nickel is worth more than a slow dime.” A self-identified “land man,” Grant has [*2] made a career of buying vacant land in Georgia and quickly turning it into enough “fast nickels” to make a good living.

These cases involve two parcels of vacant land near Atlanta, bought by Grant and partnerships in which he held interests. They paid $500,000 for one and $198,000 for the other. They turned these into charitable deductions of conservation easements that they valued at nearly $30 million combined.

Jeffrey Grant was an entrepreneur/promoter behind the scam. Judge Holmes picks up the “nickels” theme in the opinion (Slip Op. 8): “It seems highly implausible that the partnership would vote for these plans for development. Grant had previously considered developing the property but, like everyone who had attempted to do so, he lost both fast nickels and slow dimes in the process.” (See also Slip Op. 3.) 

In any event, I did read the opinion, but after the opening, there is little for tax lawyers familiar with the SCE landscape to add to their toolkits.

I am still waiting to see Tax Court Judges impose penalties on lawyers and appraisers who push bullshit gross overvaluations to waste valuable trial time (which often requires Judges to be in remote locations). See Tax Court Rejects a Bullshit Tax Shelter False Valuation Claim with Warning of Sanctions for Taxpayers, their Counsel, and Expert Witness Proffering the Bullshit (Federal Tax Procedure Blog 7/16/25; 9/10/25), here.