IRS Ramps Up Efforts to Target International Taxpayers Who Have Improperly Claimed Conservation Easement Deductions

The Internal Revenue Service (IRS) is targeting international taxpayers suspected of fraudulently claiming deductions for conservation easements on their U.S. tax returns. It has recently ramped up its efforts to investigate international taxpayers suspected of fraud and has begun issuing settlement letters to those at risk of litigation. Targeted taxpayers need an experienced Maryland international tax attorney who can communicate effectively with the IRS on their behalf.

Conservation easement deductions have become a priority enforcement area for the Internal Revenue Service (IRS) in recent years. While the IRS began devoting additional resources to conducting conservation easement audits in 2016, in 2026 it is using investigations and aggressive settlement strategies to target U.S. taxpayers suspected of underpaying. Learn more from Maryland international tax attorney Kevin E. Thorn, Managing Partner of U.S. International Tax Advisors:

Widespread Tax Fraud has Resulted in Additional Scrutiny of Conservation Easement Deductions

The IRS’ efforts to target conservation easement deductions stem from widespread abuse of these tax-mitigation tools. Conservation easement deductions offer significant federal tax savings to high-income and high-net-worth taxpayers, but fraudulent claims have prompted heightened scrutiny. 

According to the IRS, in tax litigation involving disputed conservation easement deductions, courts approve just six percent of taxpayers’ claimed deductions on average. For many taxpayers, this results in hundreds of thousands or millions of dollars in back tax liability—along with liability for interest and penalties.

Investigations Targeting Fraudulent Conservation Easement Deductions Pose Significant Risks

Facing an IRS investigation focused on a taxpayer’s conservation easement deductions poses significant risks. Not only can investigations lead to civil tax litigation and the consequences we just discussed, but they can also lead to criminal tax fraud charges in some cases. As a result, international taxpayers targeted in these investigations must engage experienced tax counsel immediately.

International Taxpayers that Receive Settlement Letters Need to Make Informed Decisions

In some cases, international taxpayers who have claimed improper conservation easement deductions (or are suspected of doing so) may receive a settlement letter from the IRS. The IRS launched a “time-limited” settlement program in May 2026; under this program, it is offering settlements to certain taxpayers.

Taxpayers that receive settlement letters only have a limited amount of time to respond—and, as a result, it is important for taxpayers to engage experienced tax counsel promptly in this scenario as well. Whether taxpayers should accept the IRS’ settlement proposal depends on the specific circumstances at hand. When accepting the IRS’ settlement proposal is not in a taxpayer’s best interests, the taxpayer will need to quickly make informed decisions about how best to proceed.

Request a Confidential Consultation with Maryland International Tax Attorney Kevin E. Thorn

Maryland international tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, relies on extensive experience to represent international taxpayers in high-stakes IRS matters. To request a confidential consultation with Mr. Thorn, please call 240-235-5096 or inquire online today.