Eleventh Circuit Rejects Bullshit Conservation Easement Shelter (7/20/26)

In Savannah Shoals, LLC v. Commissioner, ___ F.4th ___ (11th Cir. 2026), CA11 here and GS [to come], the Eleventh Circuit rejects the appeal of a bullshit conservation easement shelter. The result is foretold in the first paragraph of the opinion, noting that the shelter claimed a “$23 million” deduction for an easement found by the Tax Court to be worth $480,000. See Judge Goeke’s opinion Savannah Shoals LLC v. Commissioner, T.C. Memo. 2024-35, here.

I won’t discuss the opinion further because, although it is 34 pages long and is designated “FOR PUBLICATION,” I don’t think it adds anything material to previously developed law, factual conclusions, and appellate review. The bottom-line is for taxpayers and promoters to avoid bullshit claims, including bullshit claims on the Tax Court’s valuations. The Court does not say that or even, for most readers, fairly imply that. Still, that is my inference. And, of course, plenty of other opinions, including from this Court, can be read for that proposition.

One interesting point is that oral argument was 12/10/25 and the unanimous opinion was 7/16/26, for 218 days gestation period for a 34 page opinion of little precedential value. (See CL docket entries here).

However, I will make some comments which are even more picky.

JAT Comments:

 1. The Court discusses the shelter’s attack on the IRS expert. (See Slip Op. 10-16.) The Court spends some time discussing FRE 702 and the Daubert Standard. As it turns out, immediately before I read Savannah Shoals, I had just revised my Federal Tax Procedure Practitioner Edition to add a footnote on the text reference to FRE 702. I just copy and paste that footnote discussion because I don’t think the Court in Savannah Shoals picked up the nuance even though I don’t think the nuance would have changed the outcome.

The Supreme Court interpreted a prior version of this Rule in Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993) to create a gatekeeping test for the admission of expert testimony. This test is often called the Daubert Standard. The 2023 amendments to FRE 702 require for admissibility that the proponent “demonstrates to the court” (i.e., not the jury) that it is “more likely than not” that the expert’s testimony: (a) “will help the trier of fact understand the evidence or determine a fact in issue”; (b) is based on sufficient facts or data”; (c) is the product of reliable principles and methods; and (d) “the opinion reflects a reliable application of the principles and methods to the facts of the case.” This is not the Daubert Standard under the prior version of FRE 702. I think that, however, courts may still name or misname the current FRE 702 standard as the Daubert Standard even when applying the current Rule 702 requirements stated earlier in this footnote. See David Bernstein, The Second Circuit's Problematic Rule 702 Analysis in its Recent Tylenol Decision (The Volokh Conspiracy 7/20/26), here (discussing Rutledge v. Walgreen Co., ___ F.4th ___ (2d Cir. 2026)) and arguing, inter alia, against use of the Daubert Standard under current Rule 702).

2. The Savannah Shoals opinion was revised by amended opinion with the “errata sheet” (Doc. 54-2) indicating that two erroneous references to “district court” were corrected to read “tax court.” (The link I provide above is to the corrected opinion.) This is not a common error, but I have seen it in other cases. Other than to note the phenomenon and the correction, I make no comment. Except:

Picky (even snarky) comment: The Court’s reference to “tax court” (without caps) is patently wrong. Section 7441 creates the “United States Tax Court.” Perhaps the Tax Court should start referring to this Court as the “United States court of appeals for the eleventh circuit.”