The Tax Times

Thursday, August 20, 2026

IRS Establishes Office of Conservation Easements — and Pulls the Plug on Its Uniform Settlement Letters

On August 19, 2026, the IRS announced in IR-2026-95 that it is standing up a dedicated Office of Conservation Easements and, at the same time, immediately concluding the uniform settlement initiative it had launched barely three months earlier in IR-2026-65 (May 13, 2026).

For the roughly 1,100 conservation easement and historic preservation easement cases still open — approximately 740 docketed in Tax Court and another 400 in Exam (Baker McKenzie) — this is a meaningful change in how, and with whom, these cases get resolved.

What the New Office Will Do

The IRS says the Office was created because conservation and historic preservation easements present "specialized tax, valuation, contractual, and procedural issues." According to the release, the Office will:

Centralize technical expertise and coordinate policy, enforcement, and case-resolution strategy across the IRS and with the Office of Chief Counsel;
Support engagement with taxpayers, practitioners, and conservation and historic preservation organizations; and
Work with Treasury to evaluate administrative and legislative options that advance Congress's conservation objectives, promote consistent tax administration, and "strengthen valuation integrity."

Once operational, the Office will serve as "central coordination and a channel for general inquiries." Contact information is to be announced separately.

Why the IRS Abandoned Uniform Settlement Letters

The candor in the release is worth quoting. The IRS states that experience administering the May initiative, "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."

The reason: "Partnership agreements, insurance arrangements, procedural posture, and other circumstances may differ materially and affect when and how taxpayers evaluate settlement."

Anyone who has actually tried to get a syndicated easement partnership to a vote inside a hard 90-day window will recognize the problem. A one-size-fits-all letter with a non-extendable clock ran headlong into partnership consent provisions, tax matters partner / partnership representative authority questions, and tax-liability insurance carriers with their own approval processes.

The Mechanics of the Transition

Four points matter operationally:

No more uniform letters. Effective August 19, 2026, the IRS will not issue additional uniform settlement letters under the May 13 program.
Existing deadlines are withdrawn. "Any deadlines for accepting previously issued offers are withdrawn." The 90-day and 45-day clocks on outstanding letters are gone.
Prior elections stand. Elections already submitted under the May 13 framework "will remain in effect and will be processed in accordance with their terms."
4. The terms themselves survive on request. Taxpayers with pending cases "may continue to request settlement under the May 13 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.

As a reminder, those standardized terms were: full disallowance of the charitable contribution deduction; an "other deduction" roughly equal to the partnership's out-of-pocket costs (often the cash contributions reflected on Schedule M-2); a 10% gross valuation misstatement penalty under §6662(h) (rising to 20% in the secondary window); statutory interest; and no up-front payment requirement, with the liability instead subject to post-settlement collection (Baker McKenzie, Greenberg Traurig).

Do Not Misread This as Leniency

The IRS closed the door on that interpretation in one sentence: "This transition does not signal a new or more favorable standardized offer. Rather, it ends issuance of uniform offers and deadlines."

Individual cases "may continue to be resolved on different terms where warranted by the hazards of litigation" — and the hazards baseline in this program area has been unforgiving: a charitable deduction limited to roughly 5% to 7% of the amount claimed, plus the full 40% gross valuation misstatement penalty.

Recent case law reinforces that the litigation alternative is expensive. In North Donald LA Property, LLC v. Commissioner, T.C. Memo. 2026-19, the Tax Court rejected the Service's 75% civil fraud penalty for failure to carry its clear-and-convincing burden — but still sustained the 40% gross valuation misstatement penalty on a wildly overstated value (JD Supra). Winning on fraud and still absorbing 40% is not a favorable outcome.

Downstream Collection: Who Actually Pays

Practitioners should be clear with investors about where the liability lands under the BBA partnership audit regime (§§ 6221–6241):

No push-out election under §6226: the partnership itself pays the settled amount. If the partnership cannot pay, investors will receive IRS notices stating the amounts they owe as a result of the settlement adjustments.
Push-out election made: the partnership must furnish statements to the investors and the IRS describing the adjustments pushed out, and each investor must take those adjustments into account on their own return.

Individual notices generally follow IRS processing after the settlement is reached and the Tax Court decision becomes final (Current Federal Tax Developments).

Practical Takeaways

Relief from the clock is not relief from the exposure. If you were racing a 90-day or 135-day deadline, that pressure is off — but the arithmetic of settling versus trying the case has not improved.
Settlement is now affirmative, not reactive. Nobody is going to mail you an offer. If the standardized terms are acceptable, you must request them from the assigned Exam or Chief Counsel representative and confirm continued eligibility.
Use the pause productively. Obtain partnership consents, resolve partnership representative authority, and get tax-liability insurance carriers aligned now, so that when an offer issues there is no scramble.
Eligibility exclusions still bite. Cases tried and awaiting opinion, cases on appeal, previously settled cases, and designated test cases (absent bound-case agreement) were outside the May framework and remain problematic.
Expect centralized, more consistent positions. A single office coordinating with Chief Counsel should reduce inconsistency between examiners — which cuts both ways for taxpayers hoping for a favorable local resolution.
Watch for what comes next. The Office's mandate to work with Treasury on "administrative and legislative options" and valuation integrity suggests future guidance on appraisal standards is a live possibility.

Have an IRS Conservation Easement Problem?

Contact the Tax Lawyers at

Marini & Associates, P.A.

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Friday, August 14, 2026

IRS Levy Trumps Bid to Recover Seized Bitcoin

A recent Colorado federal district court decision underscores a critical point for taxpayers with seized digital assets: once the IRS levies on the property to satisfy assessed tax, a motion for return of property under the criminal rules is effectively dead on arrival.

In Weeks v. United States, 2026 WL 2263139 (D. Colo. 8/6/2026), the court denied a taxpayer’s request for the return of approximately 8.7 bitcoin seized in an IRS Criminal Investigation search, holding that a later IRS tax levy on those same assets cut off his claim.

Background: Bitcoin Seized, Then Indicted

· IRS Criminal Investigation agents seized 8.7 bitcoin from Jobadiah Sinclair Weeks during a December 10, 2019 search of his Arvada, Colorado residence.

· Ten days later, the government indicted Weeks (in a New Jersey case) for conspiracy to commit wire fraud and conspiracy to offer or sell unregistered securities.

· In March 2026, Weeks moved for return of the bitcoin under Fed. R. Crim. P. 41(g), arguing:

o The indictment contained only boilerplate forfeiture language and did not specifically list the bitcoin, and

o An AUSA had allegedly told him his “personal property” would be returned (the email did not mention bitcoin).

· Weeks also asked the court to order a sworn accounting and reconciliation of all seized digital assets.

Weeks’ position was simple: because the indictment did not specifically forfeit the bitcoin, he was entitled to have it back.

Rule 41(g): An Equitable Safety Valve, Not a Back Door

Judge Philip A. Brimmer began by emphasizing that Rule 41(g) is an equitable remedy, not an automatic right. Citing United States v. Bacon, 900 F.3d 1234 (10th Cir.), the court reiterated that a movant must show:

· Irreparable harm, and

· No adequate remedy at law.

The Tenth Circuit has long characterized the court’s exercise of jurisdiction under Rule 41 (and its predecessor, Rule 41(e)) as one that should be undertaken with “caution and restraint,” per Matter of Search of Kitty’s E., 905 F.2d 1367 (10th Cir.).

In practice, this makes Rule 41(g) a narrow, discretionary safety valve, especially once other statutory regimes—like the tax levy provisions—come into play.

IRS Levy Changes Everything

The key fact was what happened after the seizure:

· The IRS served a notice of levy on the FBI, which was still holding the bitcoin, to collect Weeks’ unpaid federal income taxes under IRC § 6331(a).

· Section 6331 authorizes the Service to levy upon “all property and rights to property” of a taxpayer who neglects or refuses to pay an assessed tax.

Judge Brimmer relied on a consistent line of authority holding that a valid IRS levy forecloses relief under Rule 41(g):

· United States v. Kahre, 737 F.3d 554 (9th Cir. 2013): Rule 41 offers no relief when seized funds have been applied to tax liabilities pursuant to a notice of levy.

· United States v. Fitzen, 80 F.3d 387 (9th Cir. 1996): An IRS tax levy defeats a Rule 41(e) motion (the predecessor to Rule 41(g)).

Applying those decisions, the court held that once the IRS properly levied the bitcoin, Weeks no longer had a viable claim to have the property returned under Rule 41(g). Any challenge would need to proceed, if at all, through tax-specific remedies (e.g., contesting the underlying assessment, wrongful levy actions, or refund routes), not via a criminal procedural motion.

No Accounting Remedy Under Rule 41(g)

Weeks also asked the court to compel an accounting and reconciliation of all seized digital assets. The court rejected that request as beyond the scope of Rule 41(g), citing United States v. Riccardi, 857 F. App’x 472 (10th Cir. 2021), which limits Rule 41(g) relief to the return of property.

With no viable Rule 41(g) claim and no authority to order ancillary relief, the court denied the motion and closed the case.

Practical Takeaways for Taxpayers and Advisers

· Timing matters: Once the IRS levies on seized assets—even crypto held by another agency—the taxpayer’s remedy shifts out of the criminal rules and into the tax collection framework.

· Rule 41(g) is not a collection defense: It cannot be used to unwind a levy or reroute the IRS’s application of seized assets to tax liabilities.

· Crypto is just “property” for levy purposes: This case confirms what many practitioners assumed—digital assets held by federal agencies are fully subject to IRC § 6331 levy.

· Use the right forum: Challenges to the validity of the assessment, the levy, or the IRS’s collection actions belong in the Tax Court (pre-payment), district court (refund or wrongful levy), or through CDP and administrative channels—not Rule 41(g).

For practitioners advising clients whose crypto or other assets have been seized in a criminal investigation, this case is a reminder to coordinate early with both criminal counsel and tax counsel. If there is an existing or looming tax assessment, expect the IRS to use its levy power, and plan your strategy accordingly.

Have IRS Tax Problems?

Contact the Tax Lawyers at

Marini & Associates, P.A.

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

CTA Reporting Is Officially Dead for U.S. Companies — What FinCEN's Final Rule Means for Your Business

FinCEN Makes CTA Rollback Permanent

On Tuesday, August 11, 2026, the Financial Crimes Enforcement Network (FinCEN), the Treasury Department's financial crimes unit, issued a final rule that permanently narrows beneficial ownership information (BOI) reporting under the Corporate Transparency Act (CTA). The rule codifies the exemptions that had previously been established on an interim basis, effectively ending BOI reporting obligations for domestic shell companies and U.S. persons. It will take effect once published in the Federal Register, and FinCEN has confirmed it will delete previously submitted BOI data belonging to individuals now exempt from the reporting regime.

Background: From Broad Mandate to Narrow Scope

The CTA's reporting regime went into effect January 1, 2024, requiring most U.S. entities to disclose beneficial ownership data to FinCEN. That changed dramatically in early 2025: on March 2, 2025, Treasury announced it would not enforce penalties against U.S. citizens, domestic companies, or their beneficial owners under the existing rule. FinCEN followed on March 21, 2025, with an interim final rule (IFR) redefining "reporting company" to cover only entities formed under foreign law that register to do business in a U.S. state or tribal jurisdiction, and exempting U.S. persons entirely from providing BOI, even as beneficial owners of foreign reporting companies.

What the Final Rule Confirms

The August 11 final rule adopts the March 2025 IFR's exemptions largely verbatim, making the rollback permanent rather than a temporary enforcement posture. Key elements include:

· Domestic ("formed under U.S. state or tribal law") entities are no longer "reporting companies" under the CTA and have no BOI filing obligation.

· U.S. persons are exempt from providing BOI even when they are beneficial owners of a foreign reporting company.

· Only entities formed under foreign law and registered to do business in a U.S. state or tribal jurisdiction remain "reporting companies," and even they need not disclose U.S.-person beneficial owners.

· FinCEN will affirmatively delete BOI data on individuals it reasonably believes are U.S. persons — company applicants, beneficial owners, or FinCEN identifier holders — from its database.

· Previously reported entities and individuals need not update or correct information on file, since the exemption is retroactive in effect.

· The practical effect reaches beyond typical shell companies: an estimated 230,000 U.S. farms previously swept into CTA coverage are now exempt.

Practical Guidance for Clients

For domestic clients — including small businesses, family entities, and farms formed under U.S. law — no BOI filing, update, or correction action is required going forward. Foreign reporting companies registered to do business in the U.S. remain the primary population still subject to BOI reporting, but even they are relieved of any obligation to disclose U.S.-person owners. Given your practice's non-resident alien and cross-border structuring focus, this is a meaningful shift: BVI, Cayman, and Andorra-linked entities registering to transact business in Florida or elsewhere in the U.S. should be reassessed under the narrowed "reporting company" definition, since the compliance burden and data-collection risk profile has changed substantially from the original 2024 framework.

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