Tax Court Dawson Access to Simultaneous Opening Briefs in Syndicated Conservation Easement (1/12/26)

Readers of this blog may know that the Tax Court’s Dawson tool shows the docket entries for cases but has historically included for public view by link only documents prepared and filed by the Court. Dawson is now showing some documents prepared and filed by the parties. For an example, I point to the Simultaneous Opening Briefs in Capitol Places II Owner, LLC v. Commissioner (T.C. No. 16536-23 here at ## 264-265) involving a syndicated conservation easement. (Simultaneous Opening Briefs are acronymed or initialized to SIOB in the system and I use that convention here.) Readers might particularly be interested in the Petitioner’s SIOB, at #265 (note that the Dawson system does not have permanent links, so those wanting to see or download the documents must do so from the docket entries which I link above).

Petitioner’s SIOB is 372 pages; the IRS’s is 221 pages. I have made no attempt to read either of those briefs, but I have paged through the table of contents of both briefs and some of the briefs (as discussed below). The Petitioner's table of contents is 12 pages long and indicates that the body of the brief is 339 pages long.

Judging from Petitioner's table of contents, Petitioner offers a generous smorgasbord of all imaginable claims, many of which appear to be Hail Mary arguments.  Gemini AI says a Hail Mary argument in a legal brief is an argument “highly unlikely to succeed but is included as a last resort, in the desperate hope that a court might accept it.” I am not opining that some of the arguments are weak on merits but merely offering my gut reaction. Of course, ultimately the fatal weakness in these shelters are the bullshit valuations that often accompany the syndications to justify the return reporting positions.

Some points I noted:

 1. IRS statement (p. 11):

 55. The 2014 Form 1065 claimed a noncash charitable contribution deduction in the amount of $23,909,000 for the façade easement contribution. Ex. 32-J.

 2. IRS ultimate findings of fact (pp 92-93):

ULTIMATE FINDINGS OF FACT

1. The FMV of the Subject Property prior to the donation of the easement was $2,770,000. Entire record.

2. The FMV of the Subject Property after the donation of the easement was $2,710,000. Entire record.

3. The FMV of the easement donation was $60,000. Entire record. 4. CP II Owner is not entitled to deduct (1) the $10,000 paid for the Clark Appraisal, (2) the $70,333 paid for the LDS, or (3) the $800,000 paid to GBX for “Tax Consulting” as rental real estate expenses, and those expenses were  properly reclassified as Other Deductions at Schedule K, Line 13d in the FPAA. Entire record.

5. The FPAA was issued timely and the assessment statute expiration date has not passed. Entire record.

6. The accuracy-related penalties asserted with respect to CP II Owner received timely  supervisory approval pursuant to I.R.C. § 6751(b). Entire record.

7. Penalties under I.R.C. § 6662 for gross valuation misstatement, substantial valuation misstatement, negligence,3 and substantial understatement of income tax apply; reasonable cause defenses do not apply. Entire record.

Fn 3 As discussed in respondent’s pre-trial memorandum filed on April 11, 2025, respondent is no longer asserting the negligence or disregard of rules or regulations penalty with respect to the noncash charitable contribution deduction adjustment.

3. The ubiquitous Claud Clark, master of the bullshit appraisal for conservation easements, appears here (See Respondent’s Brief ¶¶ 235-253, pp. 52-56. As I recently noted in a blog entry (Tax Court Yet Again Finds Bullshit Conservation Easement Grossly Overvalued (Federal Tax Procedure Blog 11/4/25; 11/16/25), here):

2.    I am a bit surprised that the go-to appraiser, Claud Clark III, did not appear somewhere in the case. As you may know, Clark “settled” the injunction case with a permanent injunction but not admitting liability.  See TN here. He also seems to have given up his appraiser certifications in several states. See here.

Without calling Clark as an expert witness, this Petitioner discusses his role in the original valuation (see § 235-253, pp. 52-56) and claims some value in his original appraisal (see p,, 256 and¶ 8, p. 272): 

[*256]
Those figures align with Ms. Ramos’s residual-land-value modeling and with Mr. Clark’s original appraisal, giving the Court three independent perspectives converging on the same range. Exs. 32-J at 368, 503-P at 74-75, 505-P at 97.

 [*272]
8. Consistency with Other Experts

Mr. Kirksey’s conclusions are not outliers. They align closely with the work of two other independent experts:

Olivia Ramos’s Residual Land Value Analysis. Ms. Ramos, using a completely different methodology (residual land value), arrived at a mid-case value in the low-$20 million range. Ex. 503-P at 71-72.

Claud Clark’s Original Appraisal. Mr. Clark, the qualified appraiser who prepared the contemporaneous donation-date appraisal, also used a DCF-based approach and arrived at a valuation in the same range. Ex. 32-J at 368. The convergence of three independent experts all arriving at values in the $20–$23 million range using different analytical  frameworks is powerful evidence that the valuation is reliable

See also other similar attempts to bootstrap Clark’s valuation (pp 274, 284, 285)

4. IRS discusses Clark’s appraisal at ¶¶  101-146 pp. 18-26, noting:

146. Like Michael Ehrmann, Mr. Clark has been enjoined from performing any appraisals for façade easements. Ex. 176-J, pp. 48-50.