ATR Statement on Daines-Stabenow-Grassley Amendment #1 to the Chairman’s Mark of the “Enhancing American Retirement Now Act”

Daines-Stabenow-Grassley Amendment #1 to the Chairman’s Mark of the “Enhancing American Retirement Now Act” includes S. 2256, the “Charitable Conservation Easement Program Integrity Act,” legislation that limits the conservation easement tax deduction.

The amendment contains several pro-taxpayer improvements to S.2256.

First, it modifies the conservation easement on a prospective, not retroactive basis.

ATR opposes retroactive tax increases because they undermine confidence in the tax system and harm taxpayers that have acted based on the information available to them. Previous versions of the legislation retroactively changed the deduction effective December 23, 2016, which would impact taxpayers in tax years 2016, 2017, 2018, 2019, 2020, 2021, 2022 and for future years.

The amendment wisely fixes this and modifies the deduction prospectively.

Second, the amendment ensures revenue raised by limiting the amendment is used for tax cuts. While previous versions of the legislation were a net tax increase, this amendment is revenue neutral or a net tax cut. 

The amendment also includes a safe harbor rule providing correction relief to taxpayers that have taken conservation easements. This provision is included based on the concern that the IRS has been unfairly targeting taxpayers that claim the deduction. While this provision will provide protection to some taxpayers, it should be expanded to provide protections to all types of conservation easements. 

The new amendment contains several improvements to past versions of S.2256 by ensuring the proposal is prospective, not retroactive, and that it is not a net tax increase. Senator Daines, Stabenow, and Grassley should be applauded for these improvements. However, the proposal could still be strengthened by providing protections for all taxpayers.