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Land conservation scheme cheated IRS out of $250M: feds
Tax pros, appraisers and lawyers allegedly committed fraud
Federal prosecutors allege that participants in a tax fraud scheme involving green space conservation deductions cheated the IRS out of $250 million.
In December, two brothers working out of an Atlanta accounting firm pleaded guilty to federal tax fraud conspiracy charges for running the operation, according to Bloomberg News. The brothers, Stein and Corey Agee, received $1.7 million in commissions from clients between 2013 and 2019.
The Agees put their clients’ money into partnerships that bought and preserved undeveloped land around Georgia and the Carolinas. Such investments can be written off, per syndicated conservation easements.
They said they worked with a ring of accountants, lawyers, and real estate professionals to overvalue the land, resulting in higher deductions. According to the IRS, those deductions were illegal because they serve no purpose but tax avoidance, according to the publication.
The Agees face up to five years in prison for their roles in the scheme. They are also working with investigators who are looking into developer Jack Fisher, who allegedly organized 23 such deals across the country.
Around 1,500 people invested in the Agees’ schemes, and could face IRS audits that result in back taxes and penalties.
Conservation easements accounted for $119 million of $130 million that former President Donald Trump wrote off in in recent years.
The New York Attorney General’s office is currently investigating whether those properties were overvalued in order to receive the tax reductions.
[Bloomberg News] — Dennis Lynch