IRS Establishes Office of Conservation Easements -What It Means for Virginia Landowners and Nonprofits
On August 19, 2026, the Internal Revenue Service announced the establishment of an Office of Conservation Easements . This new office recognizes the important role conservation and historic preservation easements can play, as well as the specialized tax, valuation, contractual, and procedural issues they present .
What Is a Conservation Easement?
A conservation easement is a voluntary legal agreement between a landowner and a qualified organization that permanently limits uses of the land to protect its conservation values. Landowners who donate a conservation easement to a qualified organization may be eligible for a federal income tax deduction.
The IRS has long scrutinized conservation easement transactions due to concerns about overvaluation and tax avoidance. The establishment of the Office of Conservation Easements represents a significant shift in how the agency will administer and enforce conservation easement tax rules.
Why the IRS Created This Office
The IRS’s experience administering conservation easement initiatives, together with engagement with taxpayers, has shown that standardized, unsolicited settlement letters on a rolling basis, each with a fixed response period, are not well suited to the full range of conservation easement cases . Partnership agreements, insurance arrangements, procedural posture, and other circumstances may differ materially and affect when and how taxpayers evaluate settlement .
The Office will centralize technical expertise and coordinate policy, enforcement, and case-resolution strategy across the IRS and with the Office of Chief Counsel . It will support engagement with taxpayers, practitioners, conservation and historic preservation organizations, and other stakeholders . The Office will also work with Treasury to evaluate administrative and legislative options that advance Congress’s conservation and historic preservation objectives, promote consistent tax administration, and strengthen valuation integrity .
Changes to the Settlement Process
As part of this transition, the IRS will conclude the current uniform settlement initiative effective August 19, 2026, and will not issue any additional uniform settlement letters under the prior program . Any deadlines for accepting previously issued offers are withdrawn, though prior elections to participate in the settlement framework will remain in effect and will be processed in accordance with their terms .
Taxpayers with pending cases may continue to request settlement under the prior framework through their assigned IRS examination or Chief Counsel representative. If the case remains eligible, the IRS will issue a new offer on the same standardized terms . Individual cases may continue to be resolved on different terms where warranted by the hazards of litigation .
The IRS emphasized that this transition does not signal a new or more favorable standardized offer, but rather ends issuance of uniform offers and deadlines .
Impact on Virginia Landowners and Nonprofits
Virginia has a long history of land conservation, with numerous land trusts, conservancies, and nonprofit organizations working to protect the Commonwealth’s natural and historic resources. The establishment of a dedicated IRS office focused on conservation easements has significant implications for:
Landowners: Those considering donating a conservation easement should be aware that the IRS is centralizing its expertise and may increase scrutiny of conservation easement transactions. Working with qualified appraisers and legal counsel is essential.
Nonprofit Land Trusts: Organizations that hold conservation easements should ensure their documentation, monitoring, and enforcement practices meet IRS expectations. The Office’s coordination with Treasury may lead to new administrative or legislative proposals affecting the conservation easement deduction.
Tax Professionals: CPAs and tax advisors who work with conservation easement transactions should stay current on the Office’s guidance and policies. The shift from a uniform settlement initiative to case-by-case resolution may affect how disputes are resolved.
Virginia-Specific Considerations
Virginia has one of the most active conservation easement programs in the country. The Virginia Department of Conservation and Recreation administers the Virginia Land Preservation Tax Credit program, which provides state tax credits for conservation easement donations. Landowners considering a conservation easement should consider both federal and Virginia tax implications.
Under Virginia law, the real and personal property of organizations classified for religious, charitable, patriotic, historical, benevolent, cultural, or public park and playground purposes is exempt from taxation . Conservation easements held by qualifying organizations may qualify for property tax benefits at the local level.
What to Do Next
If you are considering a conservation easement or have a pending case, the IRS advises that taxpayers should continue working directly with their assigned representatives on case-specific matters and settlement requests . Once operational, the Office of Conservation Easements will provide central coordination and a channel for general inquiries, with additional contact information to be announced separately .
At Nova Tax & Accounting Services , our expert tax solutions team can help Virginia landowners and nonprofits navigate conservation easement tax issues. We also provide accounting and bookkeeping services to help organizations manage their financial records and maintain compliance with IRS requirements. Schedule your free consultation today to discuss your conservation easement needs.