Bulletin No. 2024–43

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2024–43

October 21, 2024

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

EMPLOYEE PLANS

Notice 2024-73, page 1007.

This notice provides guidance regarding discrete issues

related to the application of the nondiscrimination rules of

section 403(b)(12) with respect to the ERISA long-term,

part-time (LTPT) employee rules for a section 403(b) plan.

The ERISA LTPT rules were added under section 125 of

the SECURE 2.0 Act of 2022 and are effective for plan

years beginning after December 31, 2024. This notice also

(1) provides that the Department of the Treasury and the

Internal Revenue Service anticipate issuing proposed regulations with respect to section 403(b)(12)(D) and guidance

with respect to sections 202(c) and 203(b)(4) of ERISA, (2)

announces that the final regulation that the Treasury Department and the IRS intend to issue related to long term, part

time employees under section 401(k) plans will apply no

earlier than to plan years that begin on or after January 1,

2026, and (3) asks for comments on the content of this

notice.

EXEMPT ORGANIZATIONS

Announcement 2024-35, page 1013.

Revocation of IRC 501(c)(3) Organizations for failure to

meet the code section requirements. Contributions made to

the organizations by individual donors are no longer deductible under IRC 170(b)(1)(A).

INCOME TAX

Notice 2024-70, page 1001.

This notice explains the circumstances under which the

four-year replacement period under section 1033(e)(2) is

Finding Lists begin on page ii.

extended for livestock sold on account of drought. The

Appendix to this notice contains a list of counties that experienced exceptional, extreme, or severe drought conditions

during the 12-month period ending August 31, 2024. Taxpayers may use this list to determine if any extension is

available.

Rev. Proc. 2024-38, page 1010.

This revenue procedure provides guidance on the effect on

the income requirements under §§ 142(d) and 42 of the

alternative income eligibility requirements for the Department of Housing and Urban Development–Veterans Affairs

Supportive Housing (HUD–VASH) program set forth in the

notice published by HUD in the Federal Register on August

13, 2024, 89 FR 65769.

Rev. Rul. 2024-22, page 980.

The revenue ruling holds that Bourse de Montréal (MX),

a regulated exchange of Québec, Canada, is a “qualified

board or exchange” within the meaning of section 1256(g)

(7)(C).

Rev. Rul. 2024-23, page 981.

The revenue ruling holds that European Energy Exchange,

a regulated exchange of Germany, is a “qualified board or

exchange” within the meaning of section 1256(g)(7)(C).

T.D. 10007, page 981.

This document contains final regulations that identify certain syndicated conservation easement transactions and

substantially similar transactions as listed transactions, a

type of reportable transaction. Material advisors and certain participants in these listed transactions are required

to file disclosures with the IRS and are subject to penalties

for failure to disclose. The regulations affect participants in

these transactions as well as material advisors.

SPECIAL ANNOUNCEMENT

Notice 2024-72, page 1005.

This notice grants relief under section 7508A to taxpayers

affected by terrorist attacks throughout 2023 and 2024

in the State of Israel. The notice postpones deadlines for

certain time-sensitive taxpayer acts (e.g., filing and paying

taxes) and government acts (e.g., assessing and collecting

taxes) for affected taxpayers for a full year, until September

30, 2025. The “covered area” includes the State of Israel,

the West Bank and Gaza. The notice also identifies categories of affected taxpayers and provides a non-exhaustive

list of the acts postponed. The separate determination of

terroristic action and grant of relief in this notice will also

postpone acts that were postponed by Notice 2023-71 until

September 30, 2025 for taxpayers eligible for relief under

both notices.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and

enforce the law with integrity and fairness to all.

Introduction

The Internal Revenue Bulletin is the authoritative instrument

of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service

and for publishing Treasury Decisions, Executive Orders, Tax

Conventions, legislation, court decisions, and other items of

general interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application

of the tax laws, including all rulings that supersede, revoke,

modify, or amend any of those previously published in the

Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of

internal practices and procedures that affect the rights and

duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service

on the application of the law to the pivotal facts stated in

the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,

identifying details and information of a confidential nature are

deleted to prevent unwarranted invasions of privacy and to

comply with statutory requirements.

Rulings and procedures reported in the Bulletin do not have the

force and effect of Treasury Department Regulations, but they

may be used as precedents. Unpublished rulings will not be

relied on, used, or cited as precedents by Service personnel in

the disposition of other cases. In applying published rulings and

procedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,

and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless

the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on provisions

of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A,

Tax Conventions and Other Related Items, and Subpart B,

Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to these

subjects are contained in the other Parts and Subparts. Also

included in this part are Bank Secrecy Act Administrative

Rulings. Bank Secrecy Act Administrative Rulings are issued

by the Department of the Treasury’s Office of the Assistant

Secretary (Enforcement).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index

for the matters published during the preceding months. These

monthly indexes are cumulated on a semiannual basis, and are

published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

October 21, 2024 

Bulletin No. 2024–43

Part I

Section 1256.—Section

1256 Contracts Marked to

Market

(7)(C). The Mercantile Division of the

Montréal Exchange was an exchange

associated with MX that has ceased operations and is now dormant.

(Also §§ 446, 481, 7805; 1.446-1, 301.7805-1).

LAW

Rev. Rul. 2024-22

Section 1256(g)(7) provides that the

term “qualified board or exchange” means:

(A) a national securities exchange

that is registered with the Securities and

Exchange Commission,

(B) a domestic board of trade designated as a contract market by the CFTC,

or

(C) any other exchange, board of trade,

or other market that the Secretary of the

Treasury or her delegate determines has

rules adequate to carry out the purposes of

§ 1256.

ISSUE

Is Bourse de Montréal (MX), which is

a regulated exchange of Québec, Canada,

a qualified board or exchange within the

meaning of § 1256(g)(7)(C) of the Internal Revenue Code (Code)1?

FACTS

MX is a regulated exchange of Québec, Canada. On December 23, 2011, the

Commodity Futures Trading Commission

(CFTC) published final rules regarding

the registration with the CFTC of foreign boards of trade (FBOT). See Registration of Foreign Boards of Trade, 76

FR 80674 (Dec. 23, 2011), codified at

17 CFR Part 48. The effective date for the

final rules was February 21, 2012. Under

the CFTC FBOT registration system, the

CFTC may issue an Order of Registration

to an FBOT, allowing the FBOT to provide direct access to its electronic trading and order matching system from the

United States. On August 25, 2015, the

CFTC granted an Order of Registration

to MX under the CFTC FBOT registration system. An FBOT’s status under the

CFTC FBOT registration system is posted

online by the CFTC.

Rev. Rul. 86-7, 1986-1 C.B. 295, determined that the Mercantile Division of the

Montréal Exchange is a qualified board or

exchange within the meaning of § 1256(g)

1

HOLDING

The Internal Revenue Service (IRS)

determines that MX, which is a regulated

exchange of Québec, Canada, is a qualified board or exchange within the meaning of § 1256(g)(7)(C) as long as MX

holds a valid Order of Registration under

the CFTC FBOT registration system.

Effect on other revenue rulings

Rev. Rul. 86-7 is obsoleted.

that are not covered by the exception in

§ 1256(b)(2).

Under the authority of § 7805(b)(8),

the IRS will not challenge a position taken

prior to November 1, 2024, with respect to

a transaction occurring prior to such date,

by a taxpayer that reasonably relied on the

conclusion in Rev. Rul. 86-7.

CHANGE IN METHOD OF

ACCOUNTING

A change in the treatment of MX Contracts to comply with this revenue ruling is

a change in method of accounting within

the meaning of §§ 446 and 481 and the

regulations thereunder. The Commissioner

grants consent to a taxpayer to change its

method of accounting for MX Contracts

entered into on or after November 1, 2024,

to the § 1256 mark-to-market method for

the first taxable year during which the taxpayer holds such contracts. The requirement to file a Form 3115, Application for

Change in Accounting Method, in § 1.4461(e)(3)(i) of the Income Tax Regulations

is waived. The change is made on a cut-off

basis and is inapplicable to MX Contracts

that were entered into before November

1, 2024. Because the change is made on a

“cut-off” basis, there is no potential omission or duplication of income or deductions, and an adjustment under § 481 is

neither permitted nor required.

PROSPECTIVE APPLICATION

DRAFTING INFORMATION

Under the authority of § 7805(b)(8),

this revenue ruling is effective for MX

Contracts entered into on or after November 1, 2024. In the preceding sentence, the

term “MX Contracts” means futures contracts and futures contract options that are

traded on or subject to the rules of MX,

that are described in § 1256(g)(1)(A), and

The principal author of this revenue

ruling is Jonathan A. LaPlante of the

Office of Associate Chief Counsel (Financial Institutions & Products). For further

information regarding this revenue ruling, contact Jonathan A. LaPlante at (202)

317-5102 (not a toll-free number).

Unless otherwise specified, all “Section” or “§” references are to sections of the Code.

October 21, 2024

980

Bulletin No. 2024–43

Section 1256.—Section

1256 Contracts Marked to

Market

rules adequate to carry out the purposes of

§ 1256.

ment under § 481 is neither permitted nor

required.

HOLDING

DRAFTING INFORMATION

(Also §§ 446, 481, 7805, 1.446-1, 301.7805-1).

The Internal Revenue Service determines that European Energy Exchange,

which is a regulated exchange of Germany, is a qualified board or exchange

within the meaning of § 1256(g)(7)(C) as

long as European Energy Exchange holds

a valid Order of Registration under the

CFTC FBOT registration system.

The principal author of this revenue

ruling is Shawn Tetelman of the Office of

Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue ruling, contact

Shawn Tetelman at (202) 317-7053 (not a

toll-free number).

Rev. Rul. 2024-23

ISSUE

Is European Energy Exchange, which

is a regulated exchange of Germany, a

qualified board or exchange within the

meaning of § 1256(g)(7)(C) of the Internal Revenue Code (Code)1?

FACTS

European Energy Exchange is a regulated exchange of Germany. On December

23, 2011, the Commodity Futures Trading

Commission (CFTC) published final rules

regarding the registration with the CFTC of

foreign boards of trade (FBOT). See Registration of Foreign Boards of Trade, 76 FR

80674 (Dec. 23, 2011), codified at 17 CFR

Part 48. The effective date for the final rules

was February 21, 2012. Under the CFTC

FBOT registration system, the CFTC may

issue an Order of Registration to an FBOT,

allowing the FBOT to provide direct access

to its electronic trading and order matching

system from the United States. On November 5, 2019, the CFTC granted an Order of

Registration to European Energy Exchange

under the CFTC FBOT registration system.

An FBOT’s status under the CFTC FBOT

registration system is posted online by the

CFTC.

LAW

Section 1256(g)(7) provides that the

term “qualified board or exchange” means:

(A) a national securities exchange

that is registered with the Securities and

Exchange Commission,

(B) a domestic board of trade designated as a contract market by the CFTC,

or

(C) any other exchange, board of trade,

or other market that the Secretary of the

Treasury or her delegate determines has

1

PROSPECTIVE APPLICATION

Under the authority of § 7805(b)(8),

this revenue ruling is effective for European Energy Exchange Contracts entered

into on or after November 1, 2024. In

the preceding sentence, the term “European Energy Exchange Contracts” means

futures contracts and futures contract

options that are traded on or subject to

the rules of European Energy Exchange,

that are described in § 1256(g)(1)(A), and

that are not covered by the exception in

§ 1256(b)(2).

CHANGE IN METHOD OF

ACCOUNTING

A change in the treatment of European

Energy Exchange Contracts to comply

with this revenue ruling is a change in

method of accounting within the meaning of §§ 446 and 481 and the regulations

thereunder. The Commissioner grants

consent to a taxpayer to change its method

of accounting for European Energy

Exchange Contracts entered into on or

after November 1, 2024, to the § 1256

mark-to-market method for the first taxable year during which the taxpayer holds

such contracts. The requirement to file a

Form 3115, Application for Change in

Accounting Method, in § 1.446-1(e)(3)(i)

of the Income Tax Regulations is waived.

The change is made on a cut-off basis

and is inapplicable to European Energy

Exchange Contracts that were entered into

before November 1, 2024. Because the

change is made on a “cut-off” basis, there

is no potential omission or duplication

of income or deductions, and an adjust-

26 CFR 1.6011-9: Syndicated conservation easement listed transactions

T.D. 10007

DEPARTMENT OF THE

TREASURY

Internal Revenue Service

26 CFR Part 1

Syndicated Conservation

Easement Transactions as

Listed Transactions

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Final regulations.

SUMMARY: This document contains

final regulations that identify certain syndicated conservation easement transactions and substantially similar transactions

as listed transactions, a type of reportable

transaction. Material advisors and certain

participants in these listed transactions are

required to file disclosures with the IRS

and are subject to penalties for failure to

disclose. The regulations affect participants in these transactions as well as material advisors.

DATES: Effective date: These regulations

are effective on October 8, 2024.

Applicability date: For applicability

dates, see §1.6011-9(h).

FOR FURTHER INFORMATION

CONTACT: Concerning any provisions

Unless otherwise specified, all “Section” or “§” references are to sections of the Code.

Bulletin No. 2024–43

981

October 21, 2024

in the final regulations within the jurisdiction of the Associate Chief Counsel

(Income Tax & Accounting), Joshua S.

Klaber, (202) 317-4624, and Eugene Kirman, (202) 317-5149, and concerning any

provisions in the final regulations within

the jurisdiction of the Associate Chief

Counsel (Passthroughs & Special Industries), Charles Wien, (202) 317-5279 (not

toll-free numbers).

SUPPLEMENTARY INFORMATION:

Authority

This document amends the Income

Tax Regulations (26 CFR part 1) by adding final regulations under section 6011

of the Internal Revenue Code (Code) to

identify certain syndicated conservation

easement transactions and substantially

similar transactions as listed transactions,

a type of reportable transaction (final regulations).

Section 6001 of the Code provides

an express delegation of authority to the

Secretary of the Treasury or her delegate

(Secretary), requiring every taxpayer to

keep the records, render the statements,

make the returns, and comply with the

rules and regulations that the Secretary

deems necessary to demonstrate tax liability and prescribes, either by notice served

or by regulations.

Section 6011 of the Code provides an

express delegation of authority to the Secretary, requiring every taxpayer to “make a

return or statement according to the forms

and regulations prescribed by the Secretary” and “include therein the information

required by such forms or regulations.”

In addition, section 6707A(c)(1) of

the Code, in defining the term “reportable transaction” relating to the imposition of penalties under section 6707A(a)

on “[a]ny person who fails to include on

any return or statement any information

with respect to a reportable transaction

which is required under section 6011 to be

included with such return or statement,”

provides an express delegation of authority to the Secretary, stating that, “[t]he

term ‘reportable transaction’ means any

transaction with respect to which information is required to be included with

a return or statement because, as determined under regulations prescribed under

October 21, 2024

section 6011, such transaction is of a type

which the Secretary determines as having

a potential for tax avoidance or evasion.”

Section 6707A(c)(2), in defining the term

“listed transaction” provides an express

delegation of authority to the Secretary,

stating that, “[t]he term ‘listed transaction’

means a reportable transaction which is

the same as, or substantially similar to, a

transaction specifically identified by the

Secretary as a tax avoidance transaction

for purposes of section 6011.”

The final regulations are also issued

under the express delegation of authority

under section 7805(a) of the Code.

Background

I. The Proposed Regulations

On December 8, 2022, the Department of the Treasury (Treasury Department) and the IRS published a notice of

proposed rulemaking (REG-106134-22)

in the Federal Register (87 FR 75185)

proposing regulations that would identify certain syndicated conservation

easement transactions and substantially

similar transactions as “listed transactions” for purposes of §1.6011-4(b)(2)

and sections 6111 and 6112 of the Code

(proposed regulations). The provisions of

the proposed regulations are explained in

greater detail in the preamble to the proposed regulations. The Treasury Department and the IRS received 26 comments

in response to the proposed regulations and notice of public hearing that

are the subject of this final rulemaking.

The comments are available for public

inspection at https://www.regulations.

gov or upon request. A public hearing

on the proposed regulations was held by

teleconference on March 1, 2023, at 10

a.m. Eastern Time, at which five speakers

provided testimony.

After full consideration of the comments received and the testimony provided, these final regulations adopt the

proposed regulations with certain revisions described in the Summary of Comments and Explanation of Revisions.

II. Section 605 of the SECURE 2.0 Act

The SECURE 2.0 Act of 2022

(SECURE 2.0 Act), enacted as Division

982

T of the Consolidated Appropriations Act,

2023, Public Law 117-328, 136 Stat. 4459

(December 29, 2022), was enacted just 15

days after publication of the proposed regulations. Section 605(a) of the SECURE

2.0 Act added section 170(h)(7)(A) to the

Code, which provides that a contribution

by a partnership (whether directly or as

a distributive share of a contribution of

another partnership) is not treated as a

qualified conservation contribution for

purposes of section 170 if the amount of

such contribution exceeds 2.5 times the

sum of each partner’s relevant basis in

such partnership, as defined in section

170(h)(7)(B). Section 170(h)(7)(F) states

that the rules of section 170(h)(7) apply

equally to S corporations and other passthrough entities.

Section 605(a) of the SECURE 2.0

Act also added section 170(h)(7)(C)

through (E) to the Code, which provide

three exceptions to the general disallowance rule in section 170(h)(7)(A). Section 170(h)(7)(C) creates an exception

for contributions by a pass-through entity

that satisfy a three-year holding period;

section 170(h)(7)(D) creates an exception

for contributions made by family passthrough entities; and section 170(h)(7)

(E) creates an exception for contributions

made to preserve a building that is a certified historic structure (as defined in section 170(h)(4)(C)).

Section 605(b) of the SECURE 2.0

Act added section 170(f)(19) to the Code,

creating additional reporting requirements

for any qualified conservation contribution (1) the conservation purpose of which

is the preservation of any building which

is a certified historic structure (as defined

in section 170(h)(4)(C)), (2) which is

made by a partnership (whether directly

or as a distributive share of a contribution of another partnership), and (3) the

amount of which exceeds 2.5 times the

sum of each partner’s relevant basis (as

defined in section 170(h)(7)) in the partnership making the contribution. Section

170(f)(19)(C) states that, except as may be

otherwise provided by the Secretary, the

rules of section 170(f)(19) apply to S corporations and other pass-through entities

in the same manner as such rules apply to

partnerships.

Section 170(f)(19)(A) provides that no

deduction is allowed for such a contribu-

Bulletin No. 2024–43

tion unless the entity making the contribution (1) includes on its return for the

taxable year in which the contribution

is made a statement that the entity made

such a contribution and (2) provides such

information about the contribution as the

Secretary may require.

Section 605(c) of the SECURE 2.0 Act

provides that no inference is intended as to

the appropriate treatment of contributions

made in taxable years ending on or before

the date of the SECURE 2.0 Act’s enactment (December 29, 2022), or as to any

contribution for which a deduction is not

disallowed by reason of section 170(h)(7).

On November 20, 2023, the Treasury Department and the IRS published

a notice of proposed rulemaking (REG112916-23) in the Federal Register (88

FR 80910) proposing regulations concerning the statutory disallowance rule

enacted by the SECURE 2.0 Act, including the calculation of relevant basis. On

June 28, 2024, the Treasury Department

and the IRS finalized these regulations in

TD 9999 (89 FR 54284).

Summary of Comments and

Explanation of Revisions

This Summary of Comments and

Explanation of Revisions summarizes

all significant comments addressing the

proposed regulations, and describes and

responds to comments concerning: (1)

the listed transaction system generally;

(2) conservation easements generally; (3)

the continued necessity of finalizing these

regulations following passage of section

605 of the SECURE 2.0 Act; (4) the elements of the listed transaction identified in

these final regulations; and (5) the role of

donee organizations under these final regulations.

Comments outside the scope of this

rulemaking are not adopted.

I. Comments Addressing the General

Rules of the Listed Transaction System

Many comments addressed rules that

apply generally to any listed transaction.

While these comments are outside the

scope of this rulemaking, the Treasury

Department and the IRS have nonetheless

considered these comments in finalizing

these regulations.

Bulletin No. 2024–43

A. Requirement to report for currently

“open” periods upon identification of a

listed transaction

Several commenters argued that the proposed regulations’ listed transaction designation is impermissibly retroactive because

taxpayers who previously filed tax returns

(or amended tax returns) reflecting their

participation in syndicated conservation

easement transactions but that did not disclose their participation pursuant to Notice

2017-10 will be required to disclose those

transactions once these final regulations are

published in the Federal Register. The commenters opined that this so-called retroactive reach of the proposed listed transaction

designation is unfair and likely a violation

of law under various theories, including that

it may be a taking under the Fifth Amendment or constitute involuntary servitude

under the Thirteenth Amendment, and that

it undermines the purpose of the Administrative Procedure Act’s (APA) notice and

comment process. Several commenters

noted that the Tax Court has not determined

whether a listed transaction designation can

be applied retroactively; thus, their theory

has not been resolved judicially.

The reporting rules for listed transactions are outside the scope of these final

regulations, which merely identify a

listed transaction. The reporting rules for

listed transactions are found in §1.60114, which was issued pursuant to notice

and comment and finalized most recently

in TD 9350 (72 FR 43146), published in

2007 and which is not amended by these

final regulations. Section 1.6011-4(e)

(2)(i) requires reporting of transactions

entered into prior to the publication of

guidance identifying a transaction as a

listed transaction if the statute of limitations for assessment of tax is still open

when the transaction becomes a listed

transaction. While the reporting mandated

by §1.6011-4 may be with respect to prior

periods, the disclosure obligation is itself

not retroactive – it is a current reporting

obligation. Thus, the comments regarding an impermissible retroactive burden

required by §1.6011-4 are without merit.

B. Determining an “open year”

Several commenters requested additional guidance on what constitutes an

983

“open year” for purposes of reporting

the listed transaction. These commenters

opined that the final regulations should not

be able to hold open (or re-open) a statute

of limitations for a return that was filed

before the relevant transaction became a

listed transaction. One commenter stated

that such a rule would result in taxpayers

currently under audit and disputing penalties based on an expired statute of limitations finding one legal basis of their case

evaporated, undoing months or years of

analysis and evaluation.

Guidance on open years for purposes

of applying §1.6011-4 is outside the scope

of these final regulations, which merely

identify a listed transaction. However, if

a taxpayer who is required to disclose a

listed transaction for a taxable year for

which the statute of limitations has not

expired prior to the identification of the

listed transaction fails to do so, then the

taxpayer’s statute of limitations will continue to stay open for that taxable year

as provided in section 6501(c)(10) of the

Code. Section 6501(c)(10) provides that,

if a taxpayer fails to include on any return

or statement for any taxable year any

information with respect to a listed transaction (as defined in section 6707A(c)(2)

of the Code) which is required under section 6011 to be included with such return

or statement, the time for assessment of

any tax imposed by the Code with respect

to such transaction does not expire before

the date that is one year after the earlier

of (1) the date the taxpayer provides the

required information or (2) the date that

a material advisor meets the requirements

of section 6112 with respect to a request

by the Secretary under section 6112(b)

relating to such transaction with respect to

such taxpayer. Section 301.6501(c)-1(g)

(3)(iii) of the Procedure and Administration Regulations (26 CFR part 301),

which was issued pursuant to notice and

comment and finalized most recently in

TD 9718 (80 FR 16973), published in

2015, and which is not amended by these

final regulations, provides (1) that the taxable years to which the failure to disclose

relates include each taxable year that the

taxpayer participated (as defined under

section 6011 and the regulations thereunder) in a transaction that was identified

as a listed transaction and for which the

taxpayer failed to disclose the listed trans-

October 21, 2024

action as required under section 6011, and

(2) if the taxable year in which the taxpayer participated in the listed transaction is different from the taxable year in

which the taxpayer is required to disclose

the listed transaction under section 6011,

the taxable years to which the failure to

disclose relates include each taxable year

for which the taxpayer participated in the

transaction.

Several commenters asked for guidance

as to what constitutes an “open” tax year for

taxpayers that took the position they were

not required to file a Form 8886, Reportable Transaction Disclosure Statement,

because Notice 2017-10 was invalidated.

This requested guidance is also outside the

scope of these final regulations for the reasons discussed in the prior paragraph.

C. Abating section 6707A penalties

One commenter expressed concern that

there are no adequate procedures or policies for abating section 6707A penalties

with respect to listed transactions. This

comment is outside the scope of these

final regulations as the regulations merely

identify a listed transaction. The rules

concerning section 6707A penalties are

found in §301.6707A-1, which was issued

pursuant to notice and comment and finalized most recently in TD 9853 (84 FR

11217), published in 2019 and which is

not amended by these final regulations.

D. Material advisors

The proposed regulations provided no

special rules for material advisors. However, the effect of identifying a listed

transaction is, in part, to require certain

disclosures from material advisors.

One commenter asked that the final

regulations provide guidance to appraisers

on the application of any material advisor

requirements, and suggested that, if an

appraiser is engaged after an easement is

put in place, the appraiser should not be

considered a material advisor.

The requested guidance is outside the

scope of these final regulations; however,

the Treasury Department and the IRS

note that the definition of material advisor is found in §301.6111-3(b), which

was issued pursuant to notice and comment and finalized in TD 9351 (72 FR

October 21, 2024

43157), published in 2007 and which is

not amended by these final regulations. A

material advisor is a person who makes a

“tax statement,” as defined in §301.61113(b)(2)(ii), and derives gross income

in excess of the “threshold amount,” as

defined in §301.6111-3(b)(3) (generally,

$10,000 for listed transactions). Section

301.6111-3 contains no exception for

providing advice “after” the transaction

is entered into. Section 301.6111-3(b)(4)

(i) provides that a person will be treated

as becoming a material advisor when all

of the following events have occurred (in

no particular order): (1) the person provides material aid, assistance, or advice

as described in §301.6111-3(b)(2); (2) the

person directly or indirectly derives gross

income in excess of the threshold amount

as described in §301.6111-3(b)(3); and

(3) the transaction is entered into by the

taxpayer to whom or for whose benefit the

person provided the tax statement, or in the

case of a tax statement provided to another

material advisor, when the transaction is

entered into by a taxpayer to whom or for

whose benefit that material advisor provided a tax statement. Thus, an appraiser

that is engaged after an easement is put in

place can be a material adviser based on

statements or actions after an easement is

put in place.

A few commenters argued that the

“retroactivity component” to material

advisors (due to required disclosures) is

impermissible or burdensome. This comment is without merit and outside the

scope of these final regulations; however,

the Treasury Department and the IRS note

that §301.6111-3(b)(4)(iii) provides that,

if a transaction that was not a reportable

transaction is identified as a listed transaction in published guidance after the

occurrence of the events described in

§301.6111-3(b)(4)(i), the person will be

treated as becoming a material advisor on

the date the transaction is identified as a

listed transaction. As the resulting obligations imposed are limited to actions the

person must take thereafter, the requirement is not retroactive.

II. Comments Concerning Conservation

Easements Generally

Several commenters addressed aspects

of conservation easements that are out-

984

side the scope of these final regulations

but have nonetheless been considered in

adopting these final regulations. This part

II of this Summary of Comments and

Explanation of Revisions describes and

responds to comments relating to: (1) the

consistency of these final regulations with

the congressional intent to conserve land;

(2) overvaluation abuse in abusive syndicated conservation easement transactions;

(3) whether disclosure of the listed transactions is needed since taxpayers must file

Form 8283, Noncash Charitable Contributions; and (4) requests for enforcement

data on syndicated conservation easement

transactions.

A. Supporting conservation while

combatting abuse

One commenter noted that abusive

syndicated conservation easement transactions are antithetical to the concept of

charity that section 170(h) was designed

to enable. The Treasury Department and

the IRS agree.

However, several commenters opined

that identification of syndicated conservation easement transactions as listed transactions is inconsistent with congressional

intent to promote conservation. These

commenters argued that the proposed

regulations disincentivize conservation

by increasing the audit risk of taxpayers

involved in syndicated conservation easement transactions and that the uncertainty

relating to what is considered a “substantially similar” transaction has a chilling

effect. These commenters further argued

that the proposed regulations go beyond

the scope of section 170(h)(7), violate the

separation of powers, and are contrary to

the priorities of the Administration.

The Treasury Department and the IRS

do not agree with the comments criticizing the identification of syndicated conservation easement transactions as listed

transactions. Contrary to the commenters’

assertions, Congress has made it clear that

it is concerned with abusive syndicated

conservation easement transactions. See,

e.g., Syndicated Conservation-Easement

Transactions, S. Prt. 116-44 (August

2020). The minimal impact on taxpayers

who claim legitimate charitable contribution deductions for qualified conservation

contributions and who may decide to file a

Bulletin No. 2024–43

protective disclosure is far outweighed by

the benefit of requiring disclosure for the

identified transactions. In addition, combatting abusive tax shelters is a priority for

the Federal government.

B. Valuation abuse

Several commenters noted that the

central problem with abusive syndicated

conservation easements is inaccurate,

inflated, and flawed appraisals and the

associated overvaluation of conservation

easements. A few commenters asked that

these final regulations be replaced with

“meaningful guidance” on valuation or

appraisal methodology, including modifications to the rules for qualified appraisals

under §1.170A-17 and guidance on how

to determine the highest and best use of

properties for purposes of easement valuation. One commenter suggested that

the IRS litigate fraudulent appraisal practices as an alternative to “questioning the

long-standing conservation practices of

donee organizations.” One commenter

suggested establishing an enhanced

appraisal process similar to the process

the IRS has established for the art community.

Any guidance on valuation is outside

the scope of these final regulations, which

are limited to identifying a listed transaction. The purpose of these final regulations is to require taxpayers and material

advisors to report transactions for which

the claimed value of a syndicated conservation easement contribution strongly

indicates overvaluation and thus tax

avoidance. The Treasury Department and

the IRS have challenged and will continue

to challenge abusive appraisal practices

and overvaluation.

C. Disclosures

Some commenters questioned why the

IRS needs to identify certain syndicated

conservation easements as a listed transaction when contributions of conservation

easements are already disclosed on the

Form 8283, which contains, among other

information, the easement’s appraised

value, when and how the property was

acquired, the donor’s cost or adjusted

basis, the amount deducted, and the date

of the contribution. The commenters noted

Bulletin No. 2024–43

that the Form 8283 must be prepared completely and accurately because a deduction will be disallowed if any information

is missing.

The Form 8283, which is filed as a part

of a taxpayer’s tax return, does not include

all the information contained on Form

8886. It also does not alert the Office of

Tax Shelter Analysis to the taxpayer’s participation in an abusive transaction, nor

does it trigger disclosure and other obligations of material advisors to the transaction. Accordingly, these comments are

not adopted.

D. Requests for enforcement data

Some commenters, citing to an issue in

the remand of CIC Services, LLC v. IRS,

592 F. Supp. 3d 677 (E.D. Tenn. 2022),

asserted that the proposed regulations

are arbitrary and capricious because, in

their opinion, the APA requires numerical data on syndicated conservation easement transactions as part of the rationale

for identifying a listed transaction. The

commenters requested the number of

past syndicated conservation easement

transactions, the number of syndicated

conservation easement transactions challenged, the status and/or outcome of every

current syndicated conservation easement

challenge, the number of syndicated conservation easement transactions deemed

abusive by courts, the dollar amounts

involved in syndicated conservation easement transactions, the number of taxpayers affected by syndicated conservation

easement transactions, the nature and

amount of the contributions involved, the

value and acreage of the property conserved by syndicated conservation easement transactions, and the effect of syndicated conservation easement transactions

on nature and wildlife.

CIC Services and other authorities do

not require the public release of enforcement data, or the other analysis commenters requested, as a part of rulemaking.

Section 6011 and the regulations thereunder require that the IRS (1) determine that

a transaction is a tax avoidance transaction

and (2) identify the transaction as a listed

transaction by notice, regulation, or other

form of published guidance. The Treasury

Department and the IRS have consistently

maintained, since the issuance of Notice

985

2017-10, that certain syndicated conservation easement transactions are tax avoidance transactions and have identified them

as such by notice or regulation. An offer

to potentially be allocated a charitable

contribution deduction that is at least 2.5

times one’s investment, likely resulting in

a positive after-tax financial benefit from

what is supposed to be a charitable contribution, is strongly indicative of a tax

avoidance transaction and has been identified by Congress as such. See, e.g., section

170(h)(7). Further, the data requested by

commenters is unrelated to whether the

identified transactions are tax avoidance

transactions.

III. Comments Regarding the Necessity

of These Final Regulations in Light of

Section 605 of the SECURE 2.0 Act

Several commenters questioned the

need for the proposed regulations to be

adopted as final regulations, given the

enactment in December of 2022 of section

605 of the SECURE 2.0 Act, which added

section 170(h)(7) to the Code to disallow

a deduction for “the vast majority” of the

abusive syndicated conservation easement

transactions identified in the proposed

regulations. Commenters asked that, in

light of the legislation, the proposed regulations either be withdrawn or be revised

to take a “more surgical approach” that is

in accordance with the new statute (and

addresses other concerns).

Some of these commenters opined that

the proposed regulations were overbroad

and inconsistent with congressional intent,

in part because the proposed regulations

did not include the three exceptions to section 170(h)(7)(A) that Congress included

in section 170(h)(7)(C) through (E).

These commenters argued that syndicated

conservation easement transactions that

meet an exception to section 170(h)(7)(A)

should also be excepted from the definition of the listed transaction identified in

the proposed regulations.

Other commenters supported adopting

final regulations to help the IRS identify

promoters, material advisors, and donee

organizations involved in abusive syndicated conservation easement transactions.

The commenters noted that section 605 of

the SECURE 2.0 Act is prospective only.

These commenters, however, suggested a

October 21, 2024

few modifications to the proposed rules,

which are discussed later in this part III

and in part IV of this Summary of Comments and Explanation of Revisions.

The Treasury Department and the IRS

have concluded that it is in the interest of

sound tax administration to continue to

identify abusive syndicated conservation

easement transactions as listed transactions, notwithstanding passage of section

605 of the SECURE 2.0 Act. However, in

adopting the proposed regulations as final

regulations, the Treasury Department and

the IRS have made several modifications

to the proposed rules, as described in this

Summary of Comments and Explanation

of Revisions. Thus, these final regulations

are consistent with the commenters’ recommendation that the final regulations

take “a more surgical approach” to the

definition of the syndicated conservation

easement listed transaction following the

enactment of section 170(h)(7).

Specifically, these final regulations

cover three major classes of abusive syndicated conservation easement transactions (and substantially similar transactions): (1) those that involve contributions

occurring before December 30, 2022; (2)

those for which a charitable contribution

deduction is not automatically disallowed

by section 170(h)(7); and (3) those that

substitute the contribution of a fee simple

interest in real property for the contribution of a conservation easement.

A. Transactions occurring before

December 30, 2022

Section 170(h)(7)(A) does not apply to

contributions made on or before December 29, 2022. As a result, these final regulations are necessary to obtain reporting

of transactions that are the same as, or

substantially similar to, syndicated conservation easement transactions in cases

in which the conservation easements

were contributed before December 30,

2022, and the taxpayers did not disclose

the transaction pursuant to Notice 201710. Thus, these final regulations impose

reporting requirements on taxpayers who

had not previously disclosed their participation in transactions that are the same

as, or substantially similar to, syndicated

conservation easement transactions to the

extent that a taxpayer’s participation in the

October 21, 2024

transaction occurred in one or more taxable years as to which the statute of limitations had not run as of the date these

final regulations identify the transaction as

a listed transaction.

Some commenters contended that,

since many taxpayers have already

reported their transactions under Notice

2017-10, the IRS already has the information reporting targeted by the proposed

regulations. The Treasury Department and

the IRS agree that, in such cases, duplicative reporting under these final regulations

is unnecessary. Accordingly, these final

regulations explicitly provide that taxpayers who fully disclosed their participation in syndicated conservation easement

transactions pursuant to Notice 2017-10

do not need to disclose again under these

final regulations for any taxable years

covered by the prior disclosure.

B. Transactions not automatically

disallowed by section 170(h)(7)

The final regulations do not include

an exception for transactions that are

excluded from the automatic disallowance

rule in section 170(h)(7). Of note, the

SECURE 2.0 Act, which was enacted after

the proposed regulations were issued, does

not provide that the exceptions to section

170(h)(7)(A) contained in section 170(h)

(7)(C) through (E) are also exceptions for

purposes of the listed transaction rules.

To the contrary, section 605(c)(2) of the

SECURE 2.0 Act explicitly states: “No

inference is intended as to the appropriate

treatment of …any contribution for which

a deduction is not disallowed by reason of

section 170(h)(7) of the Internal Revenue

Code of 1986, as added by this section.”

Thus, Congress has indicated that the fact

that such transactions are not automatically disallowed does not mean that such

transactions could not be abusive.

There are at least two types of conservation easement transactions for which

a charitable contribution deduction is

not automatically disallowed by section

170(h)(7) that are appropriately considered listed transactions. First, transactions

satisfying any of the three exceptions

found in section 170(h)(7)(C) through

(E) that also contain all the elements of

a transaction identified as a listed transaction under these final regulations con-

986

tinue to be transactions that the Treasury

Department and the IRS view as likely

to be abusive. Thus, the final regulations

do not include any exceptions for transactions described in section 170(h)(7)(C)

through (E).

Second, any syndicated conservation

easement transaction for which a charitable contribution deduction is not automatically disallowed by section 170(h)(7)

because the amount of the partnership’s

contribution does not exceed 2.5 times the

sum of each partner’s relevant basis in the

partnership is nevertheless a listed transaction with respect to any partner who

received promotional materials offering

the possibility of being allocated a share

of the contribution that equals or exceeds

2.5 times that partner’s investment.

C. Transactions that involve other

contributions of real property

The preamble to the proposed regulations stated that transactions in which the

contributed property is described in section 170(h)(2)(A) or (B), or is a fee interest in real property, are transactions substantially similar to the listed transaction

identified in proposed §1.6011-9(b). Several commenters noted that this language

appears to imply that any transaction that

meets the elements of the listed transaction identified in the proposed regulations,

but that consists of the contribution of

real property, is substantially similar to

the listed transaction identified in the proposed regulations.

One commenter supported the inclusion

of fee simple contributions in the preamble to the proposed regulations and asked

that fee simple transactions be expressly

identified in the regulatory text of the final

regulations. Another commenter asked

that the final regulations “clarify” whether

fee simple contributions are considered

substantially similar to syndicated conservation easement transactions, stating that

“the preamble language is not law.” However, several other commenters questioned

why contributions of fee simple interests

in property would be considered transactions that are substantially similar to the

syndicated conservation easement transaction identified in the proposed regulations. One commenter contended that the

tax consequences, specifically taxpayer

Bulletin No. 2024–43

contribution base limitations and carryover periods, are different for fee simple

contributions and conservation easement

contributions.

The Treasury Department and IRS

continue to believe that a transaction that

meets the elements of the listed transaction identified in these final regulations,

but consists of the contribution of a fee

simple interest rather than of a conservation easement, is substantially similar to

the listed transaction identified in these

final regulations. The commenters questioning the treatment of contributions of

fee simple interests as substantially similar transactions failed to address the broad

definition of substantially similar found in

§1.6011-4(c)(4), which was issued after

notice and comment; that Congress specifically adopted the term “substantially

similar” in its subsequent enactment of

section 6707A(c)(2); and that Congress

specifically referenced the definition in

§1.6011-4(c)(4) when explaining that provision. See Footnote 232 of House Report

108-548(I), 108th Cong., 2nd Sess. 2004,

at 261 (June 16, 2004) (House Report)

(emphasis added):

The provision states that, except as provided in regulations, a listed transaction

means a reportable transaction, which

is the same as, or substantially similar

to, a transaction specifically identified

by the Secretary as a tax avoidance

transaction for purposes of section

6011. For this purpose, it is expected

that the definition of “substantially

similar” will be the definition used in

Treas. Reg. sec. 1.6011–4(c)(4). However, the Secretary may modify this

definition (as well as the definitions

of “listed transaction” and “reportable

transactions”) as appropriate.

In particular, despite the differing taxpayer contribution base limitations and

carryover periods between a fee simple

donation and a conservation easement

donation, the transactions can result in

similar types of tax consequences and be

either factually similar or based on the

same or a similar tax strategy.

In sum, the Treasury Department and

the IRS agree that any contribution of

real property (including contributions

of fee simple interests and contributions

Bulletin No. 2024–43

described in section 170(h)(2)(A) or (B))

that meets the elements of the listed transaction identified in the proposed regulations is a transaction that is substantially

similar to the listed transaction identified

in the proposed regulations. Accordingly, §1.6011-9(c)(7) of these final regulations explicitly states that a transaction

that meets all the elements described in

§1.6011-9(b), except that the transaction

involves the contribution of a fee simple

interest or the contribution of a real property interest described in section 170(h)

(2)(A) or (B) instead of a conservation

easement, is substantially similar (within

the meaning of §1.6011-4(c)(4)) to the

transaction described in §1.6011-9(b).

The final regulations contain an example showing a transaction involving the

contribution of a fee simple interest that

is substantially similar to the transaction

described in §1.6011-9(b).

D. Other substantially similar

transactions

Multiple commenters raised general

concerns about the potential scope of

transactions that are “substantially similar” to the listed transaction identified in

the proposed regulations. Several of those

commenters opined that the substantially

similar rule is void for vagueness or overbroad, and some commenters requested

that the term be made more specific. Several commenters asked whether the 2.5

times rule in proposed §1.6011-9(b)(1) is

a bright-line rule; in other words, whether

transactions for which the highest estimate of charitable contribution deduction

in the promotional materials is less than

2.5 times a taxpayer’s investment could be

substantially similar to the listed transaction identified in these regulations.

As previously discussed, the term “substantially similar” is part of the statutory

definition of a listed transaction in section

6707A(c)(2); furthermore, the regulatory

definition found in §1.6011-4(c)(4) was

adopted after notice and comment and

has been viewed favorably by Congress.

Under §1.6011-4(c)(4), whether a transaction is “substantially similar” to a syndicated conservation easement transaction

depends on the tax consequences, the

tax strategy, and other facts and circumstances related to the transaction. Section

987

1.6011-4(c)(4) further provides that the

term substantially similar must be broadly

construed in favor of disclosure.

The “substantially similar” rule provides an important backstop against advisors’ and promoters’ attempts to avoid

the reporting requirements. Consistent

with that objective, these final regulations

generally do not circumscribe the types

of transactions that may be substantially

similar to the listed transaction identified

in these final regulations. Nonetheless,

as discussed in part IV.A.3. of this Summary of Comments and Explanation of

Revisions, these final regulations do provide that the 2.5 times rule is a brightline rule. Thus, transactions in which the

promotional materials offer investors the

possibility of being allocated a charitable

contribution deduction of anything less

than 2.5 times a taxpayer’s investment

generally are not substantially similar to

the listed transaction identified in these

final regulations. However, if the taxpayer

is nonetheless allocated a charitable contribution deduction that equals or exceeds

2.5 times the taxpayer’s investment, the

rebuttable presumption in §1.6011-9(d)(3)

would apply.

Several commenters asked whether

transactions that involve contributions

other than real property, such as those that

involve contributions of artwork or other

non-cash items, are listed transactions.

The Treasury Department and the IRS

have determined that such transactions

are not “substantially similar” for purposes of these final regulations because

this listed transaction relates to contributions of real property, not of personal

property. The Treasury Department and

the IRS will continue to evaluate whether

the transactions raised by commenters are

tax avoidance transactions and may propose to identify such transactions as listed

transactions in future guidance.

A few commenters asked whether

transactions that do not involve a contribution by a pass-through entity (such as a

transaction involving a contribution by an

individual or a corporation) are “substantially similar” transactions. The Treasury

Department and the IRS have determined

that transactions that do not involve a

contribution by a pass-through entity are

not considered substantially similar transactions; however, these transactions like-

October 21, 2024

wise could be proposed to be identified as

tax avoidance transactions in future guidance.

One commenter asked whether transactions that involve deductions other than

under section 170 (that is, transactions

involving the “use of different Code provisions”), are considered “substantially

similar” to the syndicated conservation

easement transaction identified in the

proposed regulations. It is possible that

a pass-through entity could use a deduction other than allowed under section 170

to obtain the same or a similar type of

tax consequences, and that such transaction would either be factually similar or

based on the same or similar tax strategy

to the listed transaction identified in these

final regulations. Therefore, the Treasury

Department and IRS conclude it is possible that a transaction that abuses the application of a section of the Code other than

section 170, for example, section 642(c),

could be a substantially similar transaction. Under §1.6011-4(f)(1), taxpayers

who are uncertain whether a particular

transaction is substantially similar to a

syndicated conservation easement transaction may request a private letter ruling

from the IRS.

Several commenters expressed concern

that, given the uncertainty about whether

a particular transaction would be substantially similar to a listed transaction, the

regulations could have a chilling effect on

the willingness of qualified organizations

to accept contributions of conservation

easements if the section 4965 carveout

were eliminated in the final regulations.

As described in part V of this Summary of

Comments and Explanation of Revisions,

these final regulations maintain the section

4965 carveout for qualified organizations,

which addresses those concerns.

IV. Comments Regarding Elements of

the Listed Transaction Identified in the

Proposed Regulations

Several comments focused on the elements of the listed transaction identified

in the proposed regulations. This part

IV describes and responds to these comments, specifically comments regarding

(1) the 2.5 times rule; (2) application of

the 2.5 times rule; (3) timing rules; and (4)

definitions.

October 21, 2024

A. The 2.5 times rule

Commenters addressed the rationale

for the 2.5 times multiple, interaction with

the 2.5 times rule in section 170(h)(7), and

whether 2.5 times is a bright line.

1. Rationale for the 2.5 times multiple

Several commenters questioned the

rationale for the 2.5 times multiple in the

proposed regulations. Some commenters

argued that, depending on the top marginal tax rate, a 2.5 times multiple would

result in minimal, if any, tax benefit to

the investor. One commenter opined that,

because there is no explanation for how

the multiple was determined, there is no

way to determine whether this criterion is

reasonable.

The Treasury Department and the IRS

have concluded, consistent with Notice

2017-10, that once a transaction offers

the possibility of a charitable contribution deduction that equals or exceeds an

amount that is 2.5 times the amount of the

taxpayer’s investment, the transaction is

a tax avoidance transaction that justifies

a reporting obligation. At this 2.5 times

threshold, a taxpayer in the highest current

marginal tax bracket claiming a charitable contribution deduction for a qualified

conservation contribution will approximately break even before considering

State tax benefits, and, for any amounts

above 2.5 times, will have an economic

gain directly from making the charitable

contribution deduction. This multiple is

also aligned with the 2.5 times threshold

established by Congress in section 605

of the SECURE 2.0 Act, which disallows

certain deductions at the partnership level

for contributions exceeding 2.5 times the

sum of each partner’s relevant basis. Thus,

the Treasury Department and the IRS conclude that it is reasonable and in the sound

interest of tax administration to adopt the

2.5 times threshold as proposed.

2. Interaction with the 2.5 times rule in

section 170(h)(7)

Several commenters addressed the

interaction of the 2.5 times rule with

section 170(h)(7) and asked whether

only transactions in which the charitable contribution deduction promised in

988

the promotional materials is exactly 2.5

times the investment need to be disclosed

(because transactions in which the deduction amount exceeds 2.5 times the investment are generally disallowed by section

170(h)(7)). Under these final regulations,

both transactions in which the charitable

contribution deduction promised in the

promotional materials is exactly 2.5 times

the investment and transactions in which

the charitable contribution deduction

promised in the promotional materials

exceeds 2.5 times the investment must be

disclosed.

As discussed in part III of this Summary of Comments and Explanation of

Revisions, certain transactions for which

a deduction is not disallowed by section

170(h)(7) are nevertheless considered

listed transactions.

3. Whether 2.5 times is a bright line

As noted in part III.D. of this Summary

of Comments and Explanation of Revisions, several commenters asked whether

2.5 times is a bright line; in other words,

whether transactions for which the highest estimate of charitable contribution

deduction in the promotional materials

is less than 2.5 times a taxpayer’s investment could be considered substantially

similar transactions. One of these commenters encouraged the IRS to clarify

that the 2.5 times rule is not intended to

create or imply a safe harbor for excessive valuations below the 2.5 times

threshold and that the 2.5 times rule does

not implicitly approve charitable contribution deduction amounts less than 2.5

times a taxpayer’s investment. This commenter noted that, regardless of whether

a contribution is a listed transaction

pursuant to §1.6011-4(b)(2), it remains

subject to all the relevant requirements

of law, including those regarding valuation and substantiation of that valuation

by means of a qualified appraisal by a

qualified appraiser pursuant to §1.170A17 that is subject to review by the IRS

for its accuracy. A few commenters asked

the IRS to pick an actual number (for

example, 2.0, 2.25, 2.45, or 2.49 times)

at which a transaction will incur greater

IRS scrutiny.

The Treasury Department and the IRS

agree that taxpayers need some certainty

Bulletin No. 2024–43

on which transactions need to be disclosed

to the IRS. The Treasury Department and

the IRS have determined that a transaction in which the promotional materials offer the taxpayer the possibility of

being allocated a charitable contribution

deduction of only an amount less than 2.5

times the taxpayer’s investment and for

which the taxpayer is actually allocated

a charitable contribution deduction of an

amount less than 2.5 times the taxpayer’s investment (so that the rebuttable

presumption in §1.6011-9(d)(3) does

not apply) generally is not “substantially

similar” to the listed transaction identified in these final regulations. This determination takes into account both the need

for taxpayer certainty on reporting obligations and the possibility of being allocated a charitable contribution deduction

the amount of which is less than 2.5 times

the amount of the taxpayer’s investment

presents less risk of the type of net-positive financial benefit to investors that

exists at and above the 2.5 times threshold. This bright-line rule does not imply

that valuations giving rise to an amount

less than 2.5 times a taxpayer’s investment are properly valued. The Treasury

Department and the IRS agree with the

commenter that, regardless of whether a

contribution is a reportable transaction

pursuant to §1.6011-4, it remains subject

to all the relevant requirements of law.

For example, a claimed charitable contribution deduction amount that is 2.0

times the partner’s investment may still

be overvalued or unsubstantiated, and

the valuation remains subject to review

by the IRS for accuracy.

In view of the foregoing, these final

regulations add new §1.6011-9(d)(1) to

state that the 2.5 times threshold is a bright

line. However, this new rule also provides

that, if a pass-through entity engages in a

series of transactions (for example, contribution of an easement followed by contribution of a fee simple interest) with a

principal purpose of avoiding the application of this bright-line rule, the series of

transactions may be disregarded, or the

arrangement may be recharacterized in

accordance with its substance. Whether a

series of transactions has a principal purpose of avoiding the application of this

bright-line rule is determined based on all

the facts and circumstances.

Bulletin No. 2024–43

B. Application of the 2.5 times rule

The proposed regulations contained

three rules to address potential avoidance

of the 2.5 times rule. Taxpayers commented on each of these rules.

1. Multiple suggested deduction amounts

The proposed regulations contained a

rule that, if the promotional materials suggest or imply a range of possible charitable

contribution deduction amounts that may

be allocated to the taxpayer, the highest

suggested or implied deduction amount

will determine whether the 2.5 times rule

is met. In addition, if one piece of promotional materials (for example, an appraisal

or oral statement) suggests or implies

a higher charitable contribution deduction amount than suggested or implied

by other promotional materials, then the

highest suggested charitable contribution

deduction amount determines whether

the 2.5 times rule is met. As the preamble to the proposed regulations explained,

this rule is intended to prevent promoters

from circumventing the 2.5 times rule by

having promotional materials contain language that is inconsistent as to the amount

of the potential charitable contribution

deduction.

One commenter stated that the proposed rule “does not apply to ambiguities in the taxpayer’s materials, it allows

the Treasury to create ambiguities in the

taxpayer’s materials.” However, another

commenter asked whether a transaction

that meets the elements of the listed transaction identified in the proposed regulations, except that the partnership merely

promises that the investment will “grow

by” 2.5 times without mentioning a charitable contribution deduction, is considered a “substantially similar” transaction.

The intent of the rule is to prevent promoters from circumventing the 2.5 times rule

by creating ambiguous promotional materials, and the transaction described in the

preceding sentence would be a substantially similar transaction. Thus, these final

regulations adopt the rule as proposed.

2. Rebuttable presumption

The proposed regulations included a

rebuttable presumption deeming the 2.5

989

times rule to be met if (1) the pass-through

entity donates a conservation easement

within three years following a taxpayer’s

investment in the pass-through entity, (2)

the pass-through entity allocates a charitable contribution deduction to the taxpayer

the amount of which equals or exceeds

two and one-half times the amount of the

taxpayer’s investment, and (3) the taxpayer claims a deduction the amount of

which equals or exceeds two and one-half

times the amount of the taxpayer’s investment. The proposed regulations provided

that this presumption may be rebutted if

the taxpayer establishes to the satisfaction

of the Commissioner that none of the promotional materials contained a suggestion

or implication that investors might be allocated a charitable contribution deduction

the amount of which equals or exceeds an

amount that is two and one-half times the

amount of their investment in the passthrough entity.

Several commenters objected to the

rebuttable presumption rule, stating that

it is “arbitrary and capricious;” that taxpayers cannot prove a negative (particularly with respect to oral representations);

that any attempt to prove in court that oral

representations were not made is hearsay;

that the regulations do not speak to how a

taxpayer is able to rebut the presumption;

that it seems to be attempting to switch the

penalty burden from the IRS to taxpayers;

and that the IRS has demonstrated to taxpayers that it will neither be fair nor listen to reasonable evidence in syndicated

conservation easement tax disputes. Commenters asked for guidance on how taxpayers may be able to rebut the rebuttable

presumption.

The Treasury Department and the IRS

conclude that the rebuttable presumption is reasonable because it is unlikely

that a taxpayer would claim a deduction

for 250 percent of their investment in a

pass-through entity within three years

of making that investment and not have

received promotional materials offering

the possibility to do so. This presumption

is needed to address transactions with

respect to which taxpayers and promoters are not forthcoming about the content

or receipt of the promotional materials.

While the Treasury Department and the

IRS decline to provide a specific method

to rebut the presumption in these final

October 21, 2024

regulations because such rebuttal would

necessarily be dependent on the taxpayer’s specific facts and circumstances, the

Treasury Department and the IRS expect

that, in appropriate cases, taxpayers will

be able to establish to the satisfaction of

the Commissioner that none of the promotional materials contained a suggestion or

implication that investors might be allocated a charitable contribution deduction

the amount of which equals or exceeds an

amount that is two and one-half times the

amount of their investment in the passthrough entity. For example, a taxpayer

may be able to rebut the presumption

by establishing that the partnership was

not open to other investors (and thus the

only promotional materials were documents needed to execute the transaction)

or that similar properties in the same area

had increased significantly in value in

the period between the time the taxpayer

invested in the partnership and the date the

conservation easement was contributed.

Contrary to commenters’ assertions,

nothing in the proposed regulations suggested that the Commissioner will disregard evidence rebutting the presumption.

Section 7803(a)(3)(D) and (J) of the Code

require the Commissioner to ensure that

employees of the IRS are familiar, and

act in accordance, with taxpayer rights,

including the right to challenge the position of the IRS, the right to be heard, and

the right to a fair and just tax system. Furthermore, the phrase “to the satisfaction

of the Commissioner” does not preclude

future judicial review, and the Commissioner bears the burden of demonstrating that each of the other elements of the

listed transaction has been fulfilled and

may have the burden of production under

section 7491(c) of the Code in a court proceeding regarding the imposition of a penalty, depending on the party against whom

it is asserted. In the view of the Treasury

Department and the IRS, evidence regarding oral promotional materials generally

would not constitute inadmissible hearsay because the oral promotional materials would not be offered for the truth of

the matters asserted therein, but rather as

evidence of what was stated. See Fed. R.

Evid. 801(c)(2).

Some commenters asked whether the

rebuttable presumption implies that taxpayers do not need to report if (1) at least

October 21, 2024

three years have passed between the taxpayer’s investment in the pass-through

entity and the pass-through’s contribution

of a conservation easement or (2) if the

deduction amount is less than 2.5 times

the amount of an investor’s investment.

The rebuttable presumption does not carry

either of these implications.

The Treasury Department and the IRS

have decided to retain the rebuttable presumption in the final regulations because

the administrative need for a rebuttable

presumption outweighs the concerns

raised by the commenters. Taxpayers and

promoters are the persons with access to

and knowledge of the promotional materials involved in their transactions. Taxpayers should not be able to escape the

requirements of these final regulations

because their syndicators were effective

in masking their promises. Accordingly,

the final regulations retain the rebuttable

presumption rule.

3. Determining the amount of a

taxpayer’s investment in the pass-through

entity

The proposed regulations contained an

anti-stuffing rule providing that, for purposes of determining whether a transaction is a listed transaction, the amount of a

taxpayer’s investment in the pass-through

entity is limited to the portion of the taxpayer’s investment that is attributable to

the portion of the real property on which

a conservation easement is placed and

that produces the charitable contribution

deduction.

A few commenters noted that the term

“investment” in proposed §1.6011-9(b)

(1) is not defined, while one commenter

stated that the anti-stuffing rule found in

proposed §1.6011-9(d)(3) provides the

taxpayer’s investment for purposes of the

2.5 times rule. Several commenters stated

that the anti-stuffing rule in the proposed

regulations is inconsistent with the relevant basis rule in section 170(h)(7)(B),

and others suggested that the anti-stuffing

rule in the proposed regulations should

be replaced with the relevant basis rule in

section 170(h)(7)(B).

The Treasury Department and the IRS

note that the term “investment” is not

generally defined within the Code. However, the Treasury Department and the

990

IRS agree with the commenter stating that

the anti-stuffing rule found in proposed

§1.6011-9(d)(3) provides the taxpayer’s

investment for purposes of the 2.5 times

rule. Further, in response to comments that

relevant basis should also be permitted to

be used to determine investment, these

final regulations provide that a taxpayer

may determine the amount of their investment in the pass-through entity using one

of the methods provided in §1.6011-9(d)

(4), which identifies the anti-stuffing

method and, for contributions occurring

on or after December 30, 2022, adds the

relevant basis method in section 170(h)

(7)(B) as another method to determine the

amount of the taxpayer’s investment in

the pass-through entity. No other methods

may be used.

In response to commenters asserting

that relevant basis should replace the

anti-stuffing rule, the relevant basis computations under section 170(h)(7) do not

apply to all transactions for which disclosure is required under these final regulations (such as to contributions before

the effective date of section 170(h)(7) in

taxable years for which the statute of limitations is still open); thus, these final regulations retain the anti-stuffing method as

one method to determine investment for

purposes of the 2.5 times rule.

i. Anti-stuffing method

As mentioned before in part IV.B.3 of

this Summary of Comments and Explanation of Revisions, several commenters

addressed the anti-stuffing rule found in

the proposed regulations, which these

final regulations rename the “anti-stuffing

method” to determine investment for purposes of the 2.5 times rule. For example,

one commenter requested clarification on

how to determine the portion of the investment that is “attributable” to the real property on which the conservation easement

is placed. Another commenter stated that

the proposed anti-stuffing rule may give

rise to constitutional challenges because

it requires the separation of investment

assets, creating more cost for investment

managers and for investors, which they

contended is a limitation on interstate

commerce, a power reserved only for the

legislative branch. One commenter opined

that the anti-stuffing rule will be impos-

Bulletin No. 2024–43

sible to apply in practice; the commenter

noted that the example of the anti-stuffing

rule in the proposed regulations involved

marketable securities with an identifiable

fair market value and questioned how to

apply the anti-stuffing rule if the passthrough entity holds multiple pieces of

property. Another commenter stated that

the example in the proposed regulations

illustrating the anti-stuffing rule was

merely an example of the basis allocation

rules under section 755 of the Code and

that allocation rules under section 755 do

not require additional explanation.

The Treasury Department and the IRS

conclude that the anti-stuffing rule provides a reasonable method to determine the

taxpayer’s investment in the pass-through

entity by looking only to amounts attributable to the property generating the charitable contribution deduction. In response to

comments requesting additional guidance

on the determination of the amount of a

taxpayer’s investment, these final regulations provide that, under the anti-stuffing method, if an investor uses non-cash

assets to acquire its interest in the passthrough entity, then the fair market value

of such assets, rather than their basis, is

the relevant measure. In particular, under

§1.6011-9(d)(4)(ii) of these final regulations, the amount of a taxpayer’s investment in the pass-through entity is the portion of the cash and fair market value of

the assets the taxpayer uses to acquire its

interest in the pass-through entity that is

attributable to the real property on which

a conservation easement is placed (or the

portion thereof, if an easement is placed

on a portion of the real property) and

that produces the charitable contribution

deduction described in §1.6011-9(b)(3).

The Treasury Department and the

IRS disagree that the anti-stuffing rule is

impossible to apply in practice. Syndicated conservation easement transactions

often involve scenarios similar to the

example provided in the proposed regulations, in which the pass-through entity

owns only cash and marketable securities

in addition to its real property. Moreover,

these regulations apply to transactions

in which the promotional materials offer

the possibility of charitable contribution

deductions, and thus the parties involved

will have necessarily considered the possible allocation of charitable contribution

Bulletin No. 2024–43

deductions based on the taxpayer’s cost of

acquiring the interest in the pass-through

entity. Accordingly, in the view of the

Treasury Department and the IRS, it is not

unduly burdensome to require the parties

to determine the amount of the taxpayer’s

acquisition cost that is allocable to the

property giving rise to the charitable contribution deduction that is being offered.

ii. Relevant basis method

The Treasury Department and the IRS

recognize that partnerships and S corporations that engage in syndicated conservation easement transactions occurring

on or after December 30, 2022, will need

to calculate relevant basis for purposes of

section 170(f)(19), and, in addition, each

investor will need to calculate the amount

of the investor’s investment for purposes

of these listed transaction regulations. To

mitigate the burden of potentially duplicative calculations, these final regulations

add an alternative method to determine the

amount of a taxpayer’s investment. These

final regulations provide that, for contributions occurring on or after December

30, 2022, taxpayers may use their relevant

basis, as determined under section 170(h)

(7)(B) and the regulations thereunder, as

the amount of their investment for purposes of §1.6011-9(b)(1).

4. Modification of the determination of

investment for qualified conservation

contributions protecting historic

structures

One commenter stated that the proposed anti-stuffing rule did not adequately

consider the difference between qualified

conservation contributions protecting historic structures and those protecting natural open space or settings. This commenter

stated that, because historic preservation

projects protect the historic character of

a building, they often require additional

investment for rehabilitation; however, the

proposed rule did not consider cash raised

for, and invested into, the preservation,

rehabilitation and maintenance of certified

historic structures in the calculation of the

investment. The commenter further stated

that the proposed regulations did not

account for additional monies that need to

be invested in a project after an easement

991

is placed to ensure that the conservation

purpose is protected in perpetuity. The

commenter stated that cash, if invested

in the real property, should be considered

part of the taxpayer’s investment in the

real property when applying the 2.5 times

rule.

The Treasury Department and the IRS

conclude that the commenter’s proposed

changes to the anti-stuffing method are not

warranted. In general, one key element in

determining whether a transaction constitutes a syndicated conservation easement

listed transaction is the ratio of the amount

of the charitable contribution deduction

allocation that an investor is offered to

the amount the investor pays to obtain

that charitable contribution deduction

allocation. To that end, the anti-stuffing

method measures the amount of the taxpayer’s cost of acquiring the interest in the

pass-through entity that is attributable to

the real property on which a conservation

easement is placed (or the portion thereof,

if an easement is placed on a portion of

the real property) and that gives rise to the

charitable contribution deduction. Charitable contribution deductions are based

on either the fair market value or adjusted

basis of the property that is contributed as

of the time of the contribution. See, e.g.,

section 170(e). Therefore, in the view of

the Treasury Department and the IRS, it is

inappropriate, in determining the amount

of a taxpayer’s investment, to look to the

amounts expended on the property after

the time of the charitable contribution.

In general, every taxpayer that contributes a conservation easement will be

required to expend some amounts on the

property after the contribution, such as

for property taxes. However, amounts of

cash that are held for expenditures after

the date the conservation easement is

contributed, whether for property taxes,

repairs, or anything else related to the

property, are not as directly related to the

resultant charitable contribution deduction that a taxpayer claims as the expenditures related to the property that precede

the conservation easement contribution.

The Treasury Department and the IRS

have concluded that it is appropriate

for the anti-stuffing method to maintain

its focus on the amounts invested in the

property giving rise to the deduction as of

the time of the charitable contribution. In

October 21, 2024

addition, the Treasury Department and the

IRS have concluded that a rule that treats

certain cash holdings as attributable to the

real property if they are “earmarked” for

future expenditures related to the property

would be difficult to administer. Such a

rule would require factually intensive estimations and projections about the amount

of future expenditures that would be necessary to fulfill the purposes of the conservation easement (as opposed to merely

enhancing the value of the building). For

these reasons, the Treasury Department

and the IRS have concluded that the final

regulations should not adopt this comment. Therefore, the final regulations

add a clarification to §1.6011-9(d)(4)(ii),

which states that assets retained to pay for

costs related to the operation and maintenance of the real property on which the

conservation easement is placed, including costs that may be incurred in future

years, are not attributable to the contributed real property.

The Treasury Department and the IRS

will continue to consider whether any

additional clarifications or modifications

to the anti-stuffing method or the alternative relevant basis method of determining

the amount of the taxpayer’s investment

in the pass-through entity would be beneficial in the context of qualified conservation contributions protecting historic

structures.

C. Timing rules

Comments addressed both the timing

of the pass-through entity’s acquisition of

the real property and whether holding the

real property for a period of time before

the contribution of the conservation easement is made should result in the transaction being excluded from the listed transaction identified in these regulations.

1. Timing of the pass-through entity’s

acquisition of the real property

Proposed §1.6011-9(b)(2) provided

that one of the steps of a syndicated conservation easement is that the taxpayer

acquires an interest directly, or indirectly

through one or more tiers of pass-through

entities, in the pass-through entity that

owns real property (that is, becomes an

investor in the entity). A few commenters

October 21, 2024

asked whether this step is met with respect

to investors who acquire an interest in an

entity that does not hold real estate at the

time the interest in the pass-through entity

is acquired. One of these commenters

requested that the IRS clearly state if it

intends proposed §1.6011-9(b)(2) to be

met in the case of an investor who acquires

an interest in a pass-through entity that

subsequently acquires real estate or an

interest in a pass-through entity holding

real estate. The commenter also stated

that, if the real property is purchased after

the investor invests in the pass-through

entity, the transaction would fall outside of

the anti-stuffing rule and therefore would

be less likely to trigger the 2.5 times rule

(because the amount of the taxpayer’s

investment would never be reduced by the

anti-stuffing rule).

The Treasury Department and the IRS

note that the proposed regulations clearly

stated that the transaction falls within the

definition of a syndicated conservation

easement transaction “regardless of the

order” in which the steps occur; therefore,

the proposed regulations already encompassed the scenario in which a taxpayer

acquires an interest in the pass-through

entity before the pass-through entity

acquires the real property. However, for

additional clarity, these final regulations

make that point explicit in §1.6011-9(b)

(2).

The Treasury Department and the IRS

do not agree with the commenter that, if

the real property is purchased after the

investor invests in the pass-through entity,

the transaction falls outside of the reach

of the anti-stuffing method. The proposed

and final regulations specifically provide

that the order in which the four steps of

a syndicated conservation easement transaction occur is not relevant. In response

to this comment, an example in these

final regulations illustrates the application of the anti-stuffing method if the

pass-through entity acquires the real property after a taxpayer invests in the passthrough entity.

2. Holding periods

The proposed regulations did not

contain any exceptions from the disclosure requirements for property held on

a long-term basis. Several commenters

992

asked that the final regulations include

an exception for such transactions.

One commenter questioned why investors who have held interests in a passthrough entity for over one year would

be required to report the syndicated conservation easement transaction because

such investors would not need to rely

on a tacked holding period to avoid the

limitations of section 170(e). One commenter contended that contributions of

land held for less than three years will

generally not be made. Several commenters observed that contributions with

a long-term holding period are excepted

from the disallowance rule of section

170(h)(7)(A) pursuant to section 170(h)

(7)(C). One commenter opined that a

hypothetical transaction in which the

promotional materials state that the property will be worth more than 2.5 times

the taxpayer’s investment in ten years

should not give rise to a listed transaction. This commenter asked that the final

regulations specify the amount of time

that must elapse between the purchase of

the property interest and the contribution

of the easement for a transaction to be

listed. Another commenter asked about a

taxpayer that inherited land that is then in

his possession for over twenty years and

decides to donate the land for the benefit

and protection of the environment.

The Treasury Department and the IRS

conclude that it is not necessary to modify

the proposed rules to provide an exception

for property that has been held for a period

of time. First, tax abuse in syndicated conservation easement transactions is not

limited to mismatches between an investor’s holding period in its interest in the

pass-through entity and the pass-through

entity’s holding period in the real property

on which the conservation easement is

placed. For example, even for transactions

in which investors may otherwise be eligible to claim a deduction of the fair market

value of the conservation easement, the

deduction is nonetheless abusive if the

easement is improperly overvalued.

Second, as discussed in part III.B. of

this Summary of Comments and Explanation of Revisions, the exception to the

disallowance rule in section 170(h)(7) for

contributions outside of a three-year holding period does not necessitate a similar

exception in these final regulations, and

Bulletin No. 2024–43

these final regulations do not provide an

exception for syndicated conservation

easements that are described in section

170(h)(7)(C).

Third, notwithstanding the commonly

anticipated appreciation of real property

values over time, it is not the case that

property values always increase. The

period a property is held is one element of

a fact-intensive inquiry into whether the

property has been overvalued. Attempting to craft an exception based on a holding period would result in a rule that is

over-inclusive and/or under-inclusive,

depending on the specific facts. The proposed hypotheticals for property held for

ten or twenty years seems unlikely to meet

all elements of the listed transaction identified in these regulations (for example, it

might not be held in a pass-through entity

or involve promotional materials). Therefore, the final regulations do not include

an exception for long-term holding periods.

D. Definitions

Commenters addressed the definitions

of (1) charitable contribution deduction,

(2) conservation easement, (3) participant,

(4) promotional materials, and (5) syndicated conservation easement transaction.

1. Charitable contribution deduction

The proposed regulations defined

“charitable contribution deduction” as “a

deduction under section 170 of the Internal Revenue Code (Code), which includes

a deduction arising from a qualified conservation contribution as defined in section 170(h)(1).”

One commenter stated that this definition is inconsistent with the listed transaction identified in the proposed regulations, which is limited to contributions of

conservation easements. This commenter

suggested that the definition should be

limited to “the deduction arising from

a qualified conservation contribution as

defined in section 170(h)(1).”

The Treasury Department and the IRS

decline to adopt this suggestion, because

some substantially similar transactions

will involve real property contributions

other than qualified conservation contributions.

Bulletin No. 2024–43

2. Conservation easement

The proposed regulations defined a

“conservation easement” as “a restriction, within the meaning of section

170(h)(2)(C), exclusively for conservation purposes, within the meaning of section 170(h)(1)(C) and section 170(h)(4),

granted in perpetuity, on the use that may

be made of the specified property.” One

commenter stated that, in all cases that

the commenter defended, the IRS had

taken the position that the conservation

easement did not meet one or more of the

requirements in this definition. The commenter opined that, if an investor fails

to disclose a syndicated conservation

easement transaction, the pass-through’s

return is selected for audit, and the IRS

determines that the donated conservation

easement fails to meet one or more elements of the definition in the proposed

regulations, then the investor would

not have had any reporting obligation

because the investor had not claimed a

deduction for a “conservation easement”

as that term was defined in the proposed

regulations. The commenter added that

if this was not the intent of the proposed

regulation, then the final regulation

should clearly so state.

The Treasury Department and the IRS

note that the third element of the listed

transaction identified in these regulations

is that “the pass-through entity that owns

the real property contributes an easement

on such real property, which it treats as a

conservation easement, to a qualified organization and allocates, directly or through

one or more tiers of pass-through entities,

a charitable contribution deduction to the

taxpayer” (emphasis added), and that the

fourth element of the listed transaction

is that “the taxpayer claims a charitable

contribution deduction with respect to

the contribution of the real property interest on the taxpayer’s Federal income tax

return.” In the commenter’s hypothetical,

the taxpayer’s treatment of the contribution as a conservation easement and claim

of a charitable contribution deduction

with respect to the conservation easement

makes the transaction a listed transaction.

Whether the IRS asserts that the conservation easement is invalid and whether the

charitable contribution deduction claimed

on the taxpayer’s Federal income tax

993

return is ultimately allowed do not affect

this outcome.

To more clearly track the language in

section 170(h), the final regulations modify the definition of conservation easement

to provide that it is a restriction (granted in

perpetuity) on the use that may be made

of the real property, within the meaning of

section 170(h)(2)(C), exclusively for conservation purposes, within the meaning of

section 170(h)(1)(C) and (h)(4).

3. Participant

The proposed regulations stated that a

taxpayer participating, within the meaning of §1.6011-4(c)(3)(i)(A), in a syndicated conservation easement transaction described in proposed §1.6011-9(b)

includes (1) an owner of a pass-through

entity, (2) a pass-through entity (any tier,

if multiple tiers are involved in the transaction), and (3) any other taxpayer whose

tax return reflects tax consequences or

a tax strategy arising from the syndicated conservation easement transaction

described in the proposed regulations. The

proposed regulations provided, consistent with Notice 2017-10, that a qualified

organization to which a syndicated conservation easement described in proposed

§1.6011-9(b) is donated is not treated as

a participant under §1.6011-4(c)(3)(i)(A)

with respect to the listed transaction.

One commenter stated that it is unclear

whether a participant who reports the

tax consequences of a transaction that is

substantially similar to a syndicated conservation easement transaction is a member of the class of participants described

under proposed §1.6011-9(e)(2). The

commenter opined that the plain language

of the proposed regulation referred only to

taxpayers who have the tax consequences

of a syndicated conservation easement

transaction. To address this comment, the

final regulations clarify that the class of

participants includes participants in transactions that are the same as, or substantially similar to, syndicated conservation

easement transactions.

One commenter requested additional

guidance on the meaning of the term “arising from” in proposed §1.6011-9(e)(2)

(iii), stating that it is ambiguous whether

an IRS attorney that was hired to enforce

syndicated conservation easement trans-

October 21, 2024

actions would be required to report the

transaction because his or her income

“arose from” the conservation easement

transaction. The Treasury Department and

the IRS conclude that further clarification

is not needed.

4. Promotional materials

The proposed regulations stated that

“promotional materials” include materials described in §301.6112-1(b)(3)(iii)(B)

and any other written or oral communication regarding the transaction provided

to investors, such as marketing materials,

appraisals (including preliminary appraisals, draft appraisals, and the appraisal

that is attached to the taxpayer’s return),

websites, transactional documents such

as the deed of conveyance, private placement memoranda, tax opinions, operating agreements, subscription agreements,

statements of the anticipated value of the

conservation easement, and statements of

the anticipated amount of the charitable

contribution deduction.

One commenter supported this definition, but several commenters thought it

was overbroad, stating that it would be

effectively impossible for a taxpayer to

prove that he or she did not receive promotional materials. Some commenters

objected to particular types of communication being included within the scope

of promotional materials. Specifically,

commenters expressed concern regarding oral communications, websites, and

documents required by law. For example,

one commenter stated that, since promotional materials are described to include

“websites” and “oral communication,”

every taxpayer would theoretically have

received “promotional materials” relating to conservation easement donations

because every taxpayer has access to

the internet. In addition, one commenter

stated that, under the proposed regulations, promotional materials would

include an oral communication made to

any other investor. The commenter also

stated that any one oral communication,

regardless of accuracy, would “render the

deduction unavailable” to all investors.

The commenter recommended that the

final regulations remove all references to

oral communications.

In response, the Treasury Department

and the IRS note that receipt of promotional materials by one investor does not

automatically trigger receipt of such materials by other investors (although it is circumstantial evidence that may be relevant

to showing receipt of promotional materials by other investors). In addition, the

broad definition of promotional materials

does not mean that the 2.5 times rule will

always be met; the quantity of promotional materials is not directly relevant to

whether the promotional materials offer

the investor the possibility of being allocated a charitable contribution deduction

that equals or exceeds an amount that is

two and one-half times the amount of the

taxpayer’s investment in the pass-through

entity. Moreover, even if the 2.5 times

rule is met, the effect is not to render the

deduction unavailable to all investors but

to meet one element of this listed transaction. The Treasury Department and the

IRS conclude that a broad definition of

promotional materials is warranted; otherwise, taxpayers may contend that they do

not meet the elements of the listed transaction identified in these final regulations

because promoters made offers via oral

communications, websites, or other documents.

Some commenters noted that Congress

did not mention promotional materials in

section 170(h)(7) and asked that the final

regulations explain the requirement’s significance in the listed transaction. The

Treasury Department and the IRS conclude that the lack of reference to promotional materials in section 170(h)(7)

is of no significance to this listed transaction, given that the purpose and scope

of section 170(h)(7), which is to disallow

a deduction, are different from those of

these regulations, which is for the IRS to

identify tax avoidance transactions.

One commenter noted that a taxpayer can claim a greatly inflated deduction regardless of whether the taxpayer

receives promotional materials and stated

that the promotional material require-

ment appears to be unnecessary and

could be removed altogether. The Treasury Department and the IRS have determined that promotional materials are an

important attribute of the listed transaction identified in these final regulations

because the existence of promotional

materials offering investors the possibility of a charitable contribution deduction

that equals or exceeds an amount that is

2.5 times the amount of the taxpayer’s

investment, on its own, is an element

that illustrates tax avoidance. Thus, the

final regulations adopt the proposed definition of promotional materials without

changes.

One commenter stated that the broad

definition of promotional materials does

not promote compliance with the law

if an attorney that created promotional

materials, such as the deed of conveyance, is considered a material advisor to

the transaction. This commenter asked

for clarity on how the definition of promotional materials in the proposed regulations relates to the definition of a material advisor.

As discussed in part I.D. of this Summary of Comments and Explanation of

Revisions, these final regulations do not

change the description of a material advisor provided in §301.6111-3(b). A material advisor is a person who makes a tax

statement, as defined in §1.6111-3(b)(2)

(ii), and derives gross income in excess

of the threshold amount, as defined in

§301.6111-3(b)(3) (generally, $10,000

for listed transactions). In general, a

deed of conveyance would not be a “tax

statement” under §301.6111-3(b)(2)(ii)

because it is not a statement “that relates

to a tax aspect of a transaction that causes

the transaction to be a reportable transaction.” In addition, in general, the deed

does not contain any statements related to

a tax aspect of the transaction that causes

the transaction to be reportable, such as

stating that an investor may be eligible

to claim a deduction amount of 2.5 times

the investor’s investment.1 As a result, the

final regulations make no modifications to

the definition of promotional materials in

response to the comment.

As noted above, a transactional document such as a deed of conveyance is considered to be a promotional material. Although the deed by itself, typically, would not offer the investor the

possibility of being allocated a charitable contribution deduction that equals or exceeds an amount that is two and one-half times the amount of the taxpayer’s investment in the pass-through

entity, whether all of the promotional materials, taken as a whole, make such an offer is a factual determination.

1

October 21, 2024

994

Bulletin No. 2024–43

5. Syndicated conservation easement

transaction

One commenter stated that “syndication itself is not bad and is often encouraged by the government” (such as in the

context of historic tax credits, low-income

housing tax credits, and new market tax

credits). The commenter opined that

the proposed regulations sow confusion

because the focus should be on abuse, not

on syndication.

The Treasury Department and the IRS

agree with the commenter that syndication in itself is not necessarily abusive.

However, the Treasury Department and

the IRS do not agree with the commenter

that the definition of syndicated conservation easement transaction in §1.60119(b) needs to explicitly use the word

“abusive.” The identification of a listed

transaction occurs only after the Treasury

Department and the IRS have determined

that the transaction is a tax avoidance

transaction. If a syndicated conservation

easement transaction does not meet the

elements of the transaction defined in

§1.6011-9(b), such as that the partnership’s promotional materials do not offer

investors the possibility of being allocated a charitable contribution deduction

the amount of which equals or exceeds

an amount that is 2.5 times the amount

of the taxpayer’s investment in the partnership (and the partnership does not in

fact allocate a charitable contribution

deduction the amount of which equals or

exceeds an amount that is 2.5 times the

amount of the taxpayer’s investment in

the partnership), then the transaction is

not a listed transaction.

V. Comments Addressing the Role of

Qualified Organizations in the Listed

Transaction

Commenters addressed both the section 4965 carveout found in the proposed

regulations and the lack of a carveout to

the definition of material advisor in the

proposed regulations for qualified organizations.

A. Section 4965 carveout

The proposed regulations included,

consistent with Notice 2017-10, the section 4965 carveout to exclude a qualified

organization2 from treatment as a party to

a syndicated conservation easement transaction under section 4965 but requested

comments on whether the final regulations

should eliminate or limit the section 4965

carveout.

Several commenters advocated for

maintaining the section 4965 carveout

for various reasons, including that section

170(h)(7)(A) will disallow deductions for

most transactions that these regulations

seek to deter, that receipt of a donated

conservation easement generally would

not constitute “net income” or “proceeds”

within the meaning of section 4965, and

that limiting or eliminating the section

4965 carveout could discourage qualified

organizations from accepting contributions

of conservation easements (particularly

due to uncertainty as to what constitutes a

“substantially similar” transaction). With

respect to the Treasury Department and

the IRS’s request for comments on limiting the carveout to qualified organizations

that conduct an adequate amount of due

diligence (and on what would constitute

adequate due diligence for this purpose),

several commenters argued that qualified

organizations are not equipped to exercise

the due diligence that could be required to

qualify for a more limited carveout. Several commenters also claimed that because

only a “small number” of qualified organizations continue to facilitate syndicated

conservation easement transactions, it

would be unfairly burdensome to all other

qualified organizations if the section 4965

carveout were limited or eliminated.

Given the addition of section 170(h)(7)

to the Code, which disallows charitable

contribution deductions for some of the

most overvalued syndicated conservation

easements, as well as other considerations

raised by the commenters, the Treasury

Department and the IRS have concluded

that it is appropriate to maintain the section 4965 carveout in these final regula-

tions. However, the Treasury Department

and the IRS will consider proposing to

eliminate or limit the section 4965 carveout in future regulations if qualified organizations continue to facilitate the syndicated conservation easement transactions

(or substantially similar transactions)

described in these regulations.

B. Donee material advisors

As discussed in part I.D. of this Summary of Comments and Explanation of

Revisions, the proposed regulations provided no special rules for material advisors and noted that this differed from the

approach taken in Notice 2017-29 (modifying Notice 2017-10), which provided

that a donee described in section 170(c)

is not treated as a material advisor under

section 6111. The proposed regulations

requested comments on whether qualified

organizations are receiving fees for providing material aid, assistance, or advice

with respect to the syndicated conservation easement transactions described in

the proposed regulations, the nature of the

services being provided, and why a carveout from the definition of material advisor

for qualified organizations is needed.

Several commenters requested that the

carveout for qualified organizations found

in Notice 2017-29 be reinstated, claiming

that the six-year look back period would

be burdensome, that the IRS is already

privy to information necessary to identify

potentially abusive syndicated conservation easement transactions via reporting

by other material advisors, and that eliminating the carveout for qualified organizations will discourage qualified organizations from accepting legitimate syndicated

conservation easements due to confusion

and fear of audits, potential penalties, and

litigation. On the other hand, no commenter explained how a qualified organization, acting solely in its capacity as a

qualified organization, could be considered a material advisor. To the contrary,

several commenters asserted that donee

organizations do not fit the definition of

“material advisor.”

A donation of a qualified conservation contribution must be made to a “qualified organization,” generally defined in section 170(h)(3), which includes donations to governmental units,

certain public charities, and Type I supporting organizations thereto. Under section 4965(c), the term “tax-exempt entity” includes, among others, entities and governmental units described

in sections 501(c) and 170(c) (other than the United States). Thus, absent the section 4965 carveout, tax-exempt entities that would be affected are donees that are qualified organizations

described in section 170(h)(3), other than the United States, that accept a conservation easement as part of the syndicated conservation easement transaction described in these regulations.

2

Bulletin No. 2024–43

995

October 21, 2024

A person is a material advisor with

respect to a transaction if the person: (1) provides material aid, assistance, or advice with

respect to organizing, managing, promoting, selling, implementing, insuring, or carrying out any reportable transaction; and (2)

directly or indirectly derives gross income

in excess of the threshold amount defined

in §301.6011-3(b)(3) for the material aid,

assistance, or advice. See §301.6111-3(b)

(1). “Gross income” includes all fees for a

tax strategy, for services for advice (whether

or not tax advice), and for the implementation of a reportable transaction, but a “fee”

does not include amounts paid to a person, including an advisor, in that person’s

capacity as a party to the transaction. See

§301.6111-3(b)(3)(ii). A person provides

material aid, assistance, or advice if the person makes or provides a tax statement to or

for the benefit of certain taxpayers who are

required to make a disclosure under section

6011 (including for participation in a listed

transaction) or other material advisors. See

§301.6111-3(b)(2)(i). “Tax statement,” for

these purposes, is any statement (including

another person’s statement), oral or written,

that relates to a tax aspect of a transaction

that causes the transaction to be a reportable

transaction. See §301.6111-3(b)(2)(ii)(A).

In a typical conservation easement

transaction, the qualified organization

signs the Form 8283 (Section B) and provides a contemporaneous written acknowledgement of the contribution. See section

170(f)(8). The qualified organization may

also receive separate cash contributions

from the donor to monitor and enforce

the easement in perpetuity. The qualified

organization might also make representations to the donor that it is a qualified

organization. Signing the Form 8283 and

the contemporaneous written acknowledgement and making representations

Notice 2017-10

All Filings 2017 to 2021

Respondents by Size

Receipts

Under 5M

5M to 10M

10M to 15M

15M to 20M

20M to 25M

Over 25M

October 21, 2024

regarding the donee’s status as a qualified

organization are not considered to be making a tax statement under §301.6111-3(b)

(2)(ii)(A). Therefore, a donee does not

provide material, aid, assistance, or advice

under §301.6111-3 merely by signing the

Form 8283 (Section B) and the contemporaneous written acknowledgement.

The Treasury Department and the IRS

conclude that a qualified organization

acting solely in its capacity as a qualified

organization by, for example, accepting a

conservation easement and separate payments or contributions to monitor and

enforce that easement, provided such payments or contributions are in fact used for

such purpose, would not be considered a

material advisor. The Treasury Department and the IRS further conclude that if

a qualified organization engages in activities that would result in the organization

meeting the requirements to be considered

a material advisor, then such organization

should be subject to the material advisor

rules, including the penalties for failure

to disclose. Thus, the final regulations

include no special carveout to material

advisor status for qualified organizations.

with the Paperwork Reduction Act (44

U.S.C. 3507(c)) under control numbers

1545-1800 and 1545-0865.

To the extent there is a change in burden as a result of these final regulations,

the change in burden will be reflected in

the updated burden estimates for the Forms

8886 and 8918. The requirement to maintain

records to substantiate information on Forms

8886 and 8918 is already contained in the

burden associated with the control number

for the forms and remains unchanged.

An agency may not conduct or sponsor,

and a person is not required to respond

to, a collection of information unless the

collection of information displays a valid

OMB control number.

II. Regulatory Flexibility Act

The collection of information contained in these final regulations is reflected

in the collection of information for Forms

8886 and 8918 that have been reviewed

and approved by the Office of Management and Budget (OMB) in accordance

The Regulatory Flexibility Act (RFA) (5

U.S.C. chapter 6) requires agencies to “prepare and make available for public comment

an initial regulatory flexibility analysis,”

which will “describe the impact of the rule

on small entities.” 5 U.S.C. 603(a). Section

605(b) of the RFA allows an agency to certify a rule if the rulemaking is not expected

to have a significant economic impact on a

substantial number of small entities.

The Secretary of the Treasury hereby certifies that these final regulations will not have

a significant economic impact on a substantial number of small entities pursuant to the

RFA. As previously explained, the basis for

these final regulations is Notice 2017-10,

2017-4 I.R.B. 544 (modified by Notice 201729, 2017-20 I.R.B. 1243, and Notice 201758, 2017-42 I.R.B. 326). The following chart

sets forth the gross receipts of respondents

to Notice 2017-10 that report Federal tax

information using Form 1065, U.S. Return of

Partnership Income, and Form 1120-S, U.S.

Income Tax Return for an S corporation:

Respondents

93.3%

3.1%

1.2%

0.6%

0.6%

1.2%

Filings

88.3%

5.2%

2.9%

0.4%

0.7%

2.5%

Effect on Other Documents

Notice 2017-10 is obsoleted for transactions occurring after October 8, 2024.

Special Analyses

I. Paperwork Reduction Act

996

Bulletin No. 2024–43

This chart shows that the majority of

respondents to Notice 2017-10 reported

gross receipts under $5 million. Even

assuming that these respondents constitute a substantial number of small entities, the final regulations will not have

a significant economic impact on these

entities because the final regulations

implement sections 6111 and 6112 and

§1.6011-4 by specifying the manner in

which and time at which an identified

transaction must be reported. Accordingly, because the final regulations are

limited in scope to time and manner of

information reporting and definitional

information, the economic impact of the

final regulations is expected to be minimal. Further, the Treasury Department

and the IRS expect the reporting burden to

be low; the information sought is necessary for regular annual return preparation

and ordinary recordkeeping. The estimated burden for any taxpayer required

to file Form 8886 is approximately 10

hours, 16 minutes for recordkeeping, 4

hours, 50 minutes for learning about the

law or the form, and 6 hours, 25 minutes

for preparing, copying, assembling, and

sending the form to the IRS. The IRS’s

Research, Applied Analytics, and Statistics division estimates that the appropriate wage rate for this set of taxpayers is

$102.08 (2022 dollars) per hour. Thus, it

is estimated that a respondent will incur

costs of approximately $2,127.00 per

filing. Disclosures received to date by

the Treasury Department and the IRS in

response to the reporting requirements of

Notice 2017-10 indicate that this small

amount will not pose any significant economic impact for those taxpayers now

required to disclose under the final regulations.

Some commenters asserted that the

hourly rate estimate of $98.87 (2021) in

the proposed regulations is much lower

than what professionals charge to prepare

Form 8886. Given the availability of more

recent data, the hourly rate estimate is

revised in the final regulations to $102.08

(2022). The new number still does not

address the substantial differences from

the commenters’ estimates. The differences are likely attributable to the different methodologies used. The commenters likely used the hourly rate that an

independent professional would charge a

Bulletin No. 2024–43

retail customer to prepare a Form 8886.

The Treasury Department and the IRS

used the hourly cost that a business owner

would pay to employ such a professional.

This method was determined based on

the comments received from stakeholders

objecting to reporting of the retail hourly

rate at earlier points.

One commenter asked for the data

source for the hourly rate estimate. The

source data used by our data unit comes

from the Bureau of Labor Statistics.

Some commenters asserted that the

estimate of the time to prepare Form

8886 is too low as provided because (1)

the estimate ignores the time necessary

to comply with the reporting requirement

for the years to which the requirement

applies retroactively and (2) the estimate

does not properly account for some of the

time spent, such as learning new topics. At

this time, the Treasury Department and the

IRS did not find a practical way to adjust

the time estimate in response to these

comments due to (1) the uncertainties

involved and (2) with respect to the prior

years, the effect of revealing our underreporting estimates on enforcement.

For the reasons stated, a regulatory

flexibility analysis under the RFA is not

required. Pursuant to section 7805(f) of

the Code, the proposed rule preceding this

rulemaking was submitted to the Chief

Counsel for the Office of Advocacy of the

Small Business Administration for comment on its impact on small business, and

no comments were received.

III. Unfunded Mandates Reform Act

Section 202 of the Unfunded Mandates

Reform Act of 1995 (UMRA) requires

that agencies assess anticipated costs and

benefits and take certain other actions

before issuing a final rule that includes

any Federal mandate that may result in

expenditures in any one year by a State,

local, or Tribal government, in the aggregate, or by the private sector, of $100

million (updated annually for inflation).

One commenter argued that it is at least

possible that the UMRA trigger of $100

million could be triggered because of the

potential burdens of updating State or

local regulations concerning the acceptance of land donations, harmonizing

information reporting with the require-

997

ments of the regulations, and cooperation

with examination proceedings. The Treasury Department and the IRS have considered this comment and conclude that it is

not persuasive, particularly in light of the

continuing carve-out for donees in these

final regulations. This final rule does not

include any Federal mandate that may

result in expenditures by State, local, or

Tribal governments, or by the private sector in excess of that threshold.

IV. Executive Order 13132: Federalism

Executive Order 13132 (Federalism)

prohibits an agency from publishing any

rule that has federalism implications if

the rule either imposes substantial, direct

compliance costs on State and local governments, and is not required by statute,

or preempts State law, unless the agency

meets the consultation and funding

requirements of section 6 of the Executive order. One commenter suggested

that, if the Treasury Department and the

IRS decide to eliminate the carveout for

donees described in section 170(c) from

being treated as a party to the transaction

under section 4965, then the final regulations will have federalism implications

under Executive Order 13132. The final

regulations maintain the section 4965 carveout. This final rule does not have federalism implications and does not impose

substantial direct compliance costs on

State and local governments or preempt

State law within the meaning of the Executive order.

V. Regulatory Planning and Review

Pursuant to the Memorandum of Agreement, Review of Treasury Regulations

under Executive Order 12866 (June 9,

2023), tax regulatory actions issued by the

IRS are not subject to the requirements of

section 6(b) of Executive Order 12866, as

amended. Therefore, a regulatory impact

assessment is not required.

VI. Congressional Review Act

Pursuant to the Congressional Review

Act (5 U.S.C. 801 et seq.), the Office of

Information and Regulatory Affairs designated this rule as not a major rule, as

defined by 5 U.S.C. 804(2).

October 21, 2024

Statement of Availability of IRS

Documents

Guidance cited in this preamble is published in the Internal Revenue Bulletin

and is available from the Superintendent

of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by

visiting the IRS website at https://www.

irs.gov.

Drafting Information

The principal authors of these final regulations are Joshua S. Klaber and Eugene

Kirman, Office of Associate Chief Counsel (Income Tax & Accounting). Other

personnel from the Treasury Department

and the IRS participated in their development.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

Amendments to the Regulations

Accordingly, 26 CFR part 1 is amended

as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation

for part 1 is amended by adding an entry

for §1.6011-9 in numerical order to read in

part as follows:

Authority: 26 U.S.C. 7805 * * *

*****

Section 1.6011-9 also issued under 26

U.S.C. 6001 and 6011.

*****

Par. 2. Section 1.6011-9 is added to

read as follows:

§1.6011-9 Syndicated conservation

easement listed transactions.

(a) Identification as listed transaction. Transactions that are the same as,

or substantially similar to, a transaction

described in paragraph (b) of this section

are identified as listed transactions for

purposes of §1.6011-4(b)(2).

(b) Syndicated conservation easement

transaction. The term syndicated conservation easement transaction means a

October 21, 2024

transaction in which the following steps

occur (regardless of the order in which

they occur)-(1) A taxpayer receives promotional

materials that offer investors in a passthrough entity the possibility of being allocated a charitable contribution deduction

the amount of which equals or exceeds an

amount that is two and one-half times the

amount of the taxpayer’s investment, as

determined in paragraph (d)(4) of this section, in the pass-through entity, as determined under paragraph (d) of this section

(2.5 times rule);

(2) The taxpayer acquires an interest,

directly or indirectly through one or more

tiers of pass-through entities, in the passthrough entity that owns or acquires real

property (that is, becomes an investor in

the entity);

(3) The pass-through entity that owns

the real property contributes an easement

on such real property, which it treats as a

conservation easement, to a qualified organization and allocates, directly or through

one or more tiers of pass-through entities,

a charitable contribution deduction to the

taxpayer; and

(4) The taxpayer claims a charitable

contribution deduction with respect to

the contribution of the real property interest on the taxpayer’s Federal income tax

return.

(c) Definitions. The following definitions apply for purposes of this section:

(1) Charitable contribution deduction.

The term charitable contribution deduction means a deduction under section 170

of the Internal Revenue Code (Code),

which includes a deduction arising from

a qualified conservation contribution as

defined in section 170(h)(1) of the Code.

(2) Conservation easement. The term

conservation easement means a restriction

(granted in perpetuity) on the use which

may be made of the real property, within

the meaning of section 170(h)(2)(C) of

the Code, exclusively for conservation

purposes, within the meaning of section

170(h)(1)(C) and (h)(4) of the Code.

(3) Pass-through entity. The term passthrough entity means a partnership, S corporation, or trust (other than a grantor

trust within the meaning of subchapter J

of chapter 1 of the Code).

(4) Promotional materials. The term

promotional materials includes materials

998

described in §301.6112-1(b)(3)(iii)(B) of

this chapter and any other written or oral

communication regarding the transaction

provided to investors, such as marketing

materials, appraisals (including preliminary appraisals, draft appraisals, and

the appraisal that is attached to the taxpayer’s return), websites, transactional

documents such as deeds of conveyance,

private placement memoranda, tax opinions, operating agreements, subscription

agreements, statements of the anticipated

value of the conservation easement, and

statements of the anticipated amount of

the charitable contribution deduction.

(5) Qualified organization. The term

qualified organization means an organization described in section 170(h)(3) of the

Code.

(6) Real property. The term real property includes all land, structures, and

buildings, including a certified historic

structure defined in section 170(h)(4)(C)

of the Code.

(7) Substantially similar. The term substantially similar is defined in §1.60114(c)(4). For example, transactions that

meet the elements of paragraph (b) of

this section, except that the pass-through

entity contributes a fee simple interest in

real property or a real property interest

described in section 170(h)(2)(A) or (B)

of the Code rather than a conservation

easement, are substantially similar to the

listed transaction identified in this section.

(d) Application of the 2.5 times rule—

(1) Bright-line rule. Transactions for

which the promotional materials offer

the taxpayer the possibility of being allocated a charitable contribution deduction

of only an amount less than 2.5 times the

taxpayer’s investment and for which the

taxpayer is actually allocated a charitable

contribution deduction of an amount less

than 2.5 times the taxpayer’s investment

(so that the rebuttable presumption in

paragraph (d)(3) of this section does not

apply) are generally not considered substantially similar to the listed transaction

identified in this section. However, if a

pass-through entity engages in a series of

transactions with a principal purpose of

avoiding the application of the bright-line

rule in this paragraph (d)(1), the series of

transactions may be disregarded or the

arrangement may be recharacterized in

accordance with its substance. Whether a

Bulletin No. 2024–43

series of transactions has a principal purpose of avoiding the application of this

bright-line rule is determined based on all

the facts and circumstances.

(2) Multiple suggested contribution

amounts. If the promotional materials

suggest or imply a range of possible charitable contribution deduction amounts

that may be allocated to the taxpayer, the

highest suggested or implied contribution

amount determines whether the 2.5 times

rule in this paragraph (d) is met. In addition, if one piece of promotional materials

(for example, an appraisal or oral statement) states a higher charitable contribution deduction amount than stated by other

promotional materials, then the highest

stated charitable contribution deduction

amount determines whether the 2.5 times

rule is met.

(3) Rebuttable presumption. The 2.5

times rule in this paragraph (d) is deemed

to be met if the pass-through entity donates

a real property interest within three years

following the taxpayer’s investment in

the pass-through entity, the pass-through

entity allocates a charitable contribution

deduction to the taxpayer the amount of

which equals or exceeds two and one-half

times the amount of the taxpayer’s investment, and the taxpayer claims a charitable contribution deduction the amount of

which equals or exceeds two and one-half

times the amount of the taxpayer’s investment. This presumption may be rebutted if

the taxpayer establishes to the satisfaction

of the Commissioner that none of the promotional materials contained a suggestion

or implication that investors might be allocated a charitable contribution deduction

that equals or exceeds an amount that is

two and one-half times the amount of their

investment in the pass-through entity.

(4) Determining the amount of the taxpayer’s investment in the pass-through

entity—(i) In general. A taxpayer may

determine the amount of the taxpayer’s

investment in the pass-through entity for

purposes of paragraph (b) of this section

using either the anti-stuffing method in

paragraph (d)(4)(ii) of this section or, for

contributions made after December 29,

2022, the relevant basis method in paragraph (d)(4)(iii) of this section. No other

methods may be used.

(ii) Anti-stuffing method. Under the

anti-stuffing method, the amount of a tax-

Bulletin No. 2024–43

payer’s investment in the pass-through

entity is the portion of the cash or fair market value of the assets the taxpayer uses

to acquire its interest in the pass-through

entity that is attributable to the real property on which a conservation easement is

placed (or the portion thereof, if an easement is placed on a portion of the real

property) that gives rise to the charitable

contribution described in paragraph (b)(3)

of this section. For example, if a portion

of the taxpayer’s cost of acquiring the taxpayer’s interest in the pass-through entity

is attributable to property held directly or

indirectly by the pass-through entity other

than the real property on which a conservation easement is placed as described

in paragraph (b)(3) of this section (such

other property may include other real

property, cash, cash equivalents, digital

assets, marketable securities, or other tangible or intangible assets), that portion of

the taxpayer’s acquisition cost is not considered part of the taxpayer’s investment

for purposes of this section because it is

not attributable to the portion of the real

property on which a conservation easement is placed as described in paragraph

(b)(3) of this section. For purposes of this

paragraph (d)(4)(ii), assets retained to

pay for costs related to the operation and

maintenance of the real property on which

the conservation easement is placed,

including costs that may be incurred in

future years, are not attributable to the real

property on which a conservation easement is placed as described in paragraph

(b)(3) of this section. In the case of a substantially similar transaction described in

paragraph (c)(7) of this section, the rules

in this paragraph (d)(4)(ii) apply except

that the relevant real property that gives

rise to the charitable contribution deduction described in paragraph (b)(3) of this

section is the real property donated.

(iii) Relevant basis method. For contributions made after December 29,

2022, taxpayers may use their relevant

basis, as determined in accordance with

section 170(h)(7)(B) of the Code and

§1.170A-14(k), as the amount of their

investment for purposes of paragraph (b)

of this section.

(5) Examples. For the examples in this

paragraph (d)(5), assume that the partnerships are respected for Federal tax purposes, and that the partnership allocations

999

comply with the rules of subchapter K of

chapter 1 of the Code.

(i) Example 1--(A) Facts. Individual A purchased

an interest in P, a partnership that owns real property

with a fair market value of $500,000 and marketable

securities with a fair market value of $500,000. A is

one of four equal investors in P, each of whom purchased its interest in P for $250,000 of cash. With

respect to an investor’s $250,000 payment for its

interest in P, the promotional materials stated that

P expected to allocate a $500,000 charitable contribution deduction to the investor (that is, a charitable contribution deduction that is two times the

amount an investor paid for its interest in P). After

all four investors have purchased their interests in P,

P donates a conservation easement on all of its real

property to a qualified organization as defined in section 170(h)(3) of the Code and reports a $2,000,000

charitable contribution on its Form 1065, U.S.

Return of Partnership Income, based on P obtaining

an appraisal indicating that the value of the conservation easement is $2,000,000. The Schedule K-1

(Form 1065) that P furnishes to A indicates that P

allocated a charitable contribution deduction to A for

the taxable year. A claims a charitable contribution

deduction with respect to the charitable contribution

on A’s Federal income tax return.

(B) Analysis. A’s cost of acquiring its interest

in P is $250,000. The real property on which a conservation easement was placed and that gave rise

to the charitable contribution deduction described

in paragraph (b)(3) of this section was P’s property

valued at $500,000. P’s only other asset was marketable securities worth $500,000. Accordingly, half

of A’s share of the value of the assets held by P was

attributable to the real property on which P placed a

conservation easement and that gave rise to the charitable contribution deduction described in paragraph

(b)(3) of this section. Therefore, under paragraph (d)

(4)(i) of this section, for purposes of paragraph (b)

of this section, the amount of A’s investment in P is

$125,000 (that is, half of A’s $250,000 acquisition

cost, which is the portion of A’s acquisition cost that

is attributable to the real property on which P placed

a conservation easement and that gave rise to the

charitable contribution deduction described in paragraph (b)(3) of this section). Because A’s investment

for purposes of the 2.5 times rule is $125,000 and A’s

expected charitable contribution deduction, based

on the promotional materials, is $500,000 (that is,

an expected deduction that is four times A’s investment), the 2.5 times rule of paragraph (b)(1) of this

section is met. The transaction also meets the other

elements of a syndicated conservation easement

within the meaning of paragraph (b) of this section

and therefore is a listed transaction for purposes of

§1.6011-4(b)(2).

(ii) Example 2--(A) Facts. Individual B acquires

a ten percent interest in InvestCo, a partnership,

by making a $250,000 cash contribution. Immediately after B’s acquisition, InvestCo’s only asset is

$2,500,000 of cash. The promotional materials state

that InvestCo expects to allocate a $500,000 charitable contribution deduction to B with respect to

B’s partnership interest. InvestCo pays $600,000 to

purchase marketable securities. InvestCo also purchases an interest in another partnership, PropCo,

for $1,900,000 from one of PropCo’s partners. At

October 21, 2024

the same time as the purchase, InvestCo also contributes $100,000 of its marketable securities to

PropCo. Immediately after InvestCo’s purchase and

contribution, PropCo’s only assets are real property

worth $2,400,000 and the marketable securities

worth $100,000. PropCo donates its entire interest in

the real property (a fee simple interest) to a qualified

organization as defined in section 170(h)(3) of the

Code and reports a $6,250,000 charitable contribution on its Form 1065, U.S. Return of Partnership

Income, based on PropCo obtaining an appraisal

indicating that the value of the real property is

$6,250,000. PropCo allocates a portion of the charitable contribution deduction to InvestCo. The Schedule K–1 (Form 1065) that InvestCo furnishes to B

indicates that InvestCo allocated a charitable contribution deduction to B for the taxable year. B claims a

charitable contribution deduction with respect to the

contribution on B’s Federal income tax return.

(B) Analysis. Immediately after InvestCo’s

acquisition of its interest in PropCo, InvestCo’s only

assets were its interest in PropCo and $500,000 in

marketable securities. Accordingly, eighty percent

of InvestCo’s funds ($2,000,000 / $2,500,000) were

used to acquire its interest in PropCo. B’s investment

in InvestCo is $250,000; therefore, eighty percent of

that amount, $200,000, is attributable to InvestCo’s

interest in PropCo. Immediately after InvestCo’s

acquisition of its interest in PropCo, PropCo had

real property worth $2,400,000 and marketable securities worth $100,000. As such, ninety-six percent

($2,400,000 / $2,500,000) of PropCo’s assets were

the real property that was subsequently donated.

Therefore, under paragraph (d)(4)(i) of this section,

for purposes of paragraph (b) of this section, the

amount of B’s investment in InvestCo that is attributable to the donated real property that gave rise to the

charitable contribution deduction described in paragraph (b)(3) of this section is $200,000 multiplied by

ninety-six percent, or $192,000. Because B’s investment for purposes of the 2.5 times rule is $192,000

and B’s expected charitable contribution deduction,

based on the promotional materials, is $500,000 (that

is, an expected deduction that is at least 2.5 times

B’s investment), the 2.5 times rule of paragraph (b)

(1) of this section is met. The transaction also meets

October 21, 2024

the other elements of a syndicated conservation

easement within the meaning of paragraph (b) of this

section, except that PropCo contributed a fee simple

interest in real property rather than a conservation

easement. Under paragraph (c)(7) of this section,

the transaction is substantially similar to the listed

transaction described in paragraph (b) of this section

and, therefore, under paragraph (a) of this section,

the transaction in this example is a listed transaction

for purposes of §1.6011-4(b)(2).

(e) Participation in a syndicated conservation easement transaction--(1) In

general. Whether a taxpayer has participated in a syndicated conservation easement transaction described in paragraph

(b) of this section is determined under

§1.6011-4(c)(3)(i)(A).

(2) Class of participants. For purposes

of §1.6011-4(c)(3)(i)(A), participants in a

transaction that is the same as, or substantially similar to, a syndicated conservation

easement transaction described in paragraph (b) of this section include-(i) An owner of a pass-through entity;

(ii) A pass-through entity; and

(iii) Any other taxpayer whose Federal income tax return reflects tax consequences or a tax strategy arising from a

transaction that is the same as, or substantially similar to, the transaction described

in paragraph (b) of this section.

(3) Exclusion. A qualified organization to which the conservation easement

is donated is not treated as a participant

under §1.6011-4(c)(3)(i)(A) in a syndicated conservation easement transaction

described in paragraph (b) of this section.

(f) Application of section 4965. A qualified organization to which the real property interest is donated is not treated under

1000

section 4965 of the Code as a party to the

transaction described in paragraph (b) of

this section.

(g) Disclosures under Notice 2017-10.

A taxpayer who disclosed their participation in a transaction pursuant to Notice

2017-10 and in accordance with §1.6011-4

before October 8, 2024, is treated as having made the disclosure required under

this section and §1.6011-4, for the years

covered by that disclosure, as of the date

of the disclosure under Notice 2017-10.

(h) Applicability date--(1) In general.

This section’s identification of transactions that are the same as, or substantially

similar to, the transactions described

in paragraph (b) of this section as listed

transactions for purposes of §1.6011-4(b)

(2) and sections 6111 and 6112 of the

Code is effective October 8, 2024.

(2) Applicability date for material

advisors. Notwithstanding §301.6111–

3(b)(4)(i) and (iii) of this chapter, material

advisors are required to disclose only if

they have made a tax statement on or after

October 8, 2018.

Douglas W. O’Donnell,

Deputy Commissioner.

Approved: September 16, 2024

Aviva R. Aron-Dine,

Deputy Assistant Secretary of the Treasury (Tax Policy).

(Filed by the Office of the Federal Register October

07, 2024, 8:45 a.m., and published in the issue of the

Federal Register for October 08, 2024, 89 FR 81341)

Bulletin No. 2024–43

Part III

Extension of Replacement

Period for Livestock Sold

on Account of Drought

Notice 2024-70

SECTION 1. PURPOSE

This notice provides guidance regarding an extension of the replacement period

under § 1033(e) of the Internal Revenue

Code for livestock sold on account of

drought in specified counties.

SECTION 2. BACKGROUND

.01 Nonrecognition of Gain on Involuntary Conversion of Livestock. Section

1033(a) generally provides for nonrecognition of gain when property is involuntarily converted and replaced with

property that is similar or related in service or use. Section 1033(e)(1) provides

that a sale or exchange of livestock (other

than poultry) held by a taxpayer for draft,

breeding, or dairy purposes in excess of

the number that would be sold following

the taxpayer’s usual business practices is

treated as an involuntary conversion if the

livestock is sold or exchanged solely on

account of drought, flood, or other weather-related conditions.

.02 Replacement Period. Section

1033(a)(2)(A) generally provides that

gain from an involuntary conversion is

recognized only to the extent the amount

realized on the conversion exceeds the

cost of replacement property purchased

during the replacement period. If a sale

or exchange of livestock is treated as an

involuntary conversion under § 1033(e)

(1) and is solely on account of drought,

flood, or other weather-related conditions

that result in the area being designated as

eligible for assistance by the federal government, § 1033(e)(2)(A) provides that the

replacement period ends four years after

the close of the first taxable year in which

1

any part of the gain from the conversion is

realized. Section 1033(e)(2)(B) provides

that the Secretary may extend this replacement period on a regional basis for such

additional time as the Secretary determines appropriate if the weather-related

conditions that resulted in the area being

designated as eligible for assistance by

the federal government continue for more

than three years. Section 1033(e)(2) is

effective for any taxable year with respect

to which the due date (without regard to

extensions) for a taxpayer’s return is after

December 31, 2002.

SECTION 3. EXTENSION OF

REPLACEMENT PERIOD UNDER §

1033(e)(2)(B)

Notice 2006-82, 2006-2 C.B. 529,

provides for extensions of the replacement period under § 1033(e)(2)(B). If a

sale or exchange of livestock is treated as

an involuntary conversion on account of

drought and the taxpayer’s replacement

period is determined under § 1033(e)

(2)(A), the replacement period will be

extended under § 1033(e)(2)(B) and

Notice 2006-82 until the end of the taxpayer’s first taxable year ending after the

first drought-free year for the applicable

region. For this purpose, the first droughtfree year for the applicable region is the

first 12-month period that (1) ends August

31; (2) ends in or after the last year of the

taxpayer’s four-year replacement period

determined under § 1033(e)(2)(A); and

(3) does not include any weekly period

for which exceptional, extreme, or severe

drought is reported for any location in the

applicable region. The applicable region

is the county that experienced the drought

conditions on account of which the livestock was sold or exchanged and all counties that are contiguous to that county.

A taxpayer may determine whether

exceptional, extreme, or severe drought is

reported for any location in the applicable

region by reference to U.S. Drought Mon-

itor maps that are produced on a weekly

basis by the National Drought Mitigation

Center. U.S. Drought Monitor maps are

archived at https://droughtmonitor.unl.

edu/Maps/MapArchive.aspx.

In addition, Notice 2006-82 provides

that the Internal Revenue Service will

publish in September of each year a list of

counties1 for which exceptional, extreme,

or severe drought was reported during the

preceding 12 months. Taxpayers may use

this list instead of U.S. Drought Monitor

maps to determine whether exceptional,

extreme, or severe drought has been

reported for any location in the applicable

region.

The Appendix to this notice contains

the list of counties for which exceptional, extreme, or severe drought was

reported during the 12-month period

ending August 31, 2024. Under Notice

2006-82, the 12-month period ended on

August 31, 2024, is not a drought-free

year for an applicable region that includes

any county on this list. Accordingly, for

a taxpayer who qualified for a four-year

replacement period for livestock sold or

exchanged on account of drought and

whose replacement period is scheduled to

expire at the end of 2024 (or, in the case of

a fiscal year taxpayer, at the end of the taxable year that includes August 31, 2024),

the replacement period will be extended

under § 1033(e)(2) and Notice 2006-82 if

the applicable region includes any county

on this list. This extension will continue

until the end of the taxpayer’s first taxable

year ending after a drought-free year for

the applicable region.

SECTION 4. DRAFTING

INFORMATION

The principal author of this notice is

Lewis Saideman of the Office of Associate

Chief Counsel (Income Tax & Accounting). For further information regarding

this notice, please contact Mr. Saideman at

(202) 317-7009 (not a toll-free numbers).

While Notice 2006-82 uses the term “counties,” this notice lists other applicable regions as well (e.g., boroughs, parishes, etc.).

Bulletin No. 2024–43

1001

October 21, 2024

APPENDIX

Alabama

Counties of Autauga, Baldwin, Barbour, Bibb, Blount, Bullock, Butler,

Calhoun, Cherokee, Chilton, Choctaw,

Clarke, Clay, Cleburne, Coffee, Colbert,

Conecuh, Coosa, Covington, Crenshaw,

Cullman, Dale, Dallas, DeKalb, Escambia, Etowah, Fayette, Franklin, Geneva,

Greene, Hale, Henry, Houston, Jackson,

Jefferson, Lamar, Lauderdale, Lawrence,

Limestone, Lowndes, Madison, Marengo,

Marion, Marshall, Mobile, Monroe,

Montgomery, Morgan, Perry, Pickens,

Pike, Randolph, Russell, Saint Clair,

Shelby, Sumter, Talladega, Tallapoosa,

Tuscaloosa, Walker, Washington, Wilcox,

and Winston.

Arizona

Counties of Apache, Cochise, Coconino,

Gila, Graham, Greenlee, Maricopa,

Navajo, Pima, Pinal, Santa Cruz, and

Yavapai.

Arkansas

Counties of Arkansas, Ashley, Bradley,

Calhoun, Chicot, Cleveland, Columbia, Conway, Crittenden, Cross, Dallas,

Desha, Drew, Faulkner, Fulton, Garland,

Grant, Hot Spring, Jefferson, Lafayette,

Lee, Lincoln, Little River, Lonoke,

Miller, Mississippi, Monroe, Ouachita,

Perry, Phillips, Pope, Prairie, Pulaski,

Randolph, Saint Francis, Saline, Sevier,

Sharp, Union, White, Woodruff, and

Yell.

California

County of Siskiyou.

Colorado

Counties of Adams, Alamosa, Arapahoe,

Archuleta, Baca, Bent, Boulder, Broomfield, Conejos, Costilla, Delta, Denver,

Dolores, Grand, Gunnison, Hinsdale,

Huerfano, Jackson, Jefferson, La Plata,

Larimer, Las Animas, Mesa, Mineral,

Montezuma, Montrose, Ouray, Prowers,

Rio Grande, Saguache, San Juan, San

Miguel, and Weld.

October 21, 2024

District of Columbia

District of Columbia.

Florida

Counties of Bay, Brevard, Broward,

Charlotte, Collier, DeSoto, Escambia,

Gadsden, Glades, Hardee, Hendry, Highlands, Hillsborough, Holmes, Indian

River, Jackson, Lee, Manatee, Martin,

Okaloosa, Okeechobee, Osceola, Palm

Beach, Pasco, Pinellas, Polk, Saint

Lucie, Santa Rosa, Sarasota, Walton, and

Washington.

McHenry, Marion, Mercer, Monroe,

Montgomery, Perry, Pike, Randolph,

Richland, Rock Island, Saint Clair, Schuyler, Shelby, Stephenson, Wabash, Washington, Wayne, White, Williamson, and

Winnebago.

Indiana

Counties of Bartholomew, Brown, Clay,

Daviess, Decatur, Dubois, Gibson, Greene,

Jackson, Jefferson, Jennings, Knox, Lawrence, Martin, Monroe, Orange, Owen,

Pike, Ripley, Scott, Sullivan, and Washington.

Georgia

Iowa

Counties of Baker, Baldwin, Banks,

Barrow, Bartow, Bibb, Bleckley, Butts,

Calhoun, Carroll, Catoosa, Chattooga,

Cherokee, Clarke, Clay, Cobb, Colquitt,

Dade, Dawson, Decatur, DeKalb,

Dooly, Dougherty, Douglas, Early,

Elbert, Fannin, Floyd, Forsyth, Franklin, Fulton, Gilmer, Gordon, Grady,

Gwinnett, Habersham, Hall, Haralson,

Hart, Houston, Jackson, Jasper, Jones,

Laurens, Lincoln, Lumpkin, Macon,

Madison, Miller, Mitchell, Monroe,

Murray, Oconee, Oglethorpe, Paulding,

Peach, Pickens, Polk, Pulaski, Putnam,

Quitman, Rabun, Randolph, Seminole,

Stephens, Stewart, Terrell, Thomas,

Towns, Twiggs, Union, Walker, Walton,

Washington, White, Whitfield, Wilkes,

Wilkinson, and Worth.

Counties of Adair, Adams, Allamakee,

Appanoose, Audubon, Benton, Black

Hawk, Boone, Bremer, Buchanan,

Buena Vista, Butler, Calhoun, Carroll,

Cass, Cedar, Cerro Gordo, Cherokee,

Chickasaw, Clarke, Clay, Clayton, Clinton, Crawford, Dallas, Davis, Decatur,

Delaware, Des Moines, Dubuque, Fayette, Floyd, Franklin, Greene, Grundy,

Guthrie, Hamilton, Hancock, Hardin,

Harrison, Henry, Howard, Humboldt,

Ida, Iowa, Jackson, Jasper, Jefferson,

Johnson, Jones, Keokuk, Kossuth, Lee,

Linn, Louisa, Lucas, Lyon, Madison,

Mahaska, Marion, Marshall, Mills,

Mitchell, Monona, Monroe, Montgomery, Muscatine, Page, Palo Alto, Plymouth, Pocahontas, Polk, Pottawattamie,

Poweshiek, Ringgold, Sac, Shelby,

Sioux, Story, Tama, Taylor, Union, Van

Buren, Wapello, Warren, Washington,

Wayne, Webster, Winnebago, Winneshiek, Woodbury, Worth, and Wright.

Hawaii

Counties of Hawaii, Honolulu, Kauai, and

Maui.

Idaho

Counties of Benewah, Bonner, Bonneville, Boundary, Clark, Clearwater, Fremont, Idaho, Kootenai, Latah, Lemhi,

Lewis, Nez Perce, Shoshone, and Teton.

Illinois

Counties of Adams, Bond, Boone, Brown,

Clark, Clay, Clinton, Crawford, Cumberland, Edwards, Effingham, Fayette,

Franklin, Hamilton, Hancock, Jackson,

Jasper, Jefferson, Lawrence, McDonough,

1002

Kansas

Counties of Allen, Anderson, Atchison,

Barber, Barton, Bourbon, Butler, Chase,

Chautauqua, Clark, Clay, Cloud, Coffey,

Comanche, Cowley, Crawford, Decatur,

Dickinson, Douglas, Edwards, Elk, Ellis,

Ellsworth, Finney, Ford, Franklin, Geary,

Gove, Graham, Grant, Gray, Greeley,

Greenwood, Hamilton, Harper, Harvey,

Haskell, Hodgeman, Jackson, Jefferson, Jewell, Johnson, Kearny, Kingman,

Kiowa, Labette, Lane, Leavenworth, Lincoln, Linn, Lyon, McPherson, Marion,

Marshall, Meade, Miami, Mitchell, Mont-

Bulletin No. 2024–43

gomery, Morris, Morton, Neosho, Ness,

Norton, Osage, Osborne, Ottawa, Pawnee,

Phillips, Pottawatomie, Pratt, Rawlins,

Reno, Republic, Rice, Riley, Rooks, Rush,

Russell, Saline, Scott, Sedgwick, Seward,

Shawnee, Sheridan, Sherman, Smith, Stafford, Stanton, Stevens, Sumner, Thomas,

Trego, Wabaunsee, Washington, Wilson,

Woodson, and Wyandotte.

Kentucky

Counties of Adair, Allen, Barren, Bell,

Boyd, Boyle, Breathitt, Breckinridge,

Butler, Carter, Casey, Clay, Clinton,

Cumberland, Edmonson, Elliott, Floyd,

Grayson, Green, Greenup, Hardin, Harlan, Hart, Jackson, Johnson, Knott, Knox,

Larue, Laurel, Lawrence, Leslie, Letcher,

Lincoln, McCreary, Magoffin, Marion,

Martin, Metcalfe, Monroe, Morgan, Nelson, Ohio, Owsley, Perry, Pulaski, Rockcastle, Russell, Taylor, Warren, Wayne,

and Whitley.

Louisiana

Parishes of Acadia, Allen, Ascension,

Assumption, Avoyelles, Beauregard,

Bienville, Bossier, Caddo, Calcasieu,

Caldwell, Cameron, Catahoula, Claiborne, Concordia, De Soto, East Baton

Rouge, East Carroll, East Feliciana,

Evangeline, Franklin, Grant, Iberia, Iberville, Jackson, Jefferson, Jefferson Davis,

Lafayette, Lafourche, La Salle, Lincoln,

Livingston, Madison, Morehouse, Natchitoches, Orleans, Ouachita, Plaquemines,

Pointe Coupee, Rapides, Red River, Richland, Sabine, Saint Bernard, Saint Charles,

Saint Helena, Saint James, Saint John the

Baptist, Saint Landry, Saint Martin, Saint

Mary, Saint Tammany, Tangipahoa, Tensas, Terrebonne, Union, Vermilion, Vernon, Washington, Webster, West Baton

Rouge, West Carroll, West Feliciana, and

Winn.

Maryland

Counties of Allegany, Frederick, Garrett,

Howard, Montgomery, Prince George’s,

and Washington.

Massachusetts

Counties of Dukes and Nantucket.

Bulletin No. 2024–43

Michigan

County of Dickinson, Gogebic, Iron, and

Ontonagon.

Minnesota

Counties of Aitkin, Anoka, Becker, Beltrami, Benton, Big Stone, Blue Earth,

Brown, Carlton, Carver, Cass, Chisago,

Clearwater, Cook, Cottonwood, Crow

Wing, Dakota, Dodge, Douglas, Faribault,

Fillmore, Freeborn, Goodhue, Hennepin,

Houston, Hubbard, Isanti, Itasca, Jackson,

Kanabec, Kittson, Koochiching, Lake,

Lake of the Woods, Le Sueur, Lincoln,

Lyon, McLeod, Mahnomen, Marshall,

Martin, Meeker, Mille Lacs, Morrison,

Mower, Murray, Nicollet, Nobles, Norman, Olmsted, Otter Tail, Pennington,

Pine, Pipestone, Polk, Ramsey, Red Lake,

Redwood, Renville, Rice, Rock, Roseau,

Saint Louis, Scott, Sherburne, Sibley,

Stearns, Steele, Todd, Traverse, Wabasha,

Wadena, Waseca, Washington, Watonwan,

Winona, Wright, and Yellow Medicine.

Mississippi

Counties of Adams, Alcorn, Amite,

Attala, Benton, Bolivar, Calhoun, Carroll, Chickasaw, Choctaw, Claiborne,

Clarke, Clay, Coahoma, Copiah, Covington, DeSoto, Forrest, Franklin, George,

Greene, Grenada, Hancock, Harrison,

Hinds, Holmes, Humphreys, Issaquena,

Itawamba, Jackson, Jasper, Jefferson, Jefferson Davis, Jones, Kemper, Lafayette,

Lamar, Lauderdale, Lawrence, Leake,

Lee, Leflore, Lincoln, Lowndes, Madison,

Marion, Marshall, Monroe, Montgomery,

Neshoba, Newton, Noxubee, Oktibbeha,

Panola, Pearl River, Perry, Pike, Pontotoc,

Prentiss, Quitman, Rankin, Scott, Sharkey, Simpson, Smith, Stone, Sunflower,

Tallahatchie, Tate, Tippah, Tishomingo,

Tunica, Union, Walthall, Warren, Washington, Wayne, Webster, Wilkinson, Winston, Yalobusha, and Yazoo.

Missouri

Counties of Adair, Andrew, Audrain, Barton, Bates, Benton, Bollinger, Boone,

Buchanan, Caldwell, Callaway, Camden,

Cape Girardeau, Carroll, Carter, Cass,

Cedar, Chariton, Christian, Clark, Clay,

1003

Clinton, Cole, Cooper, Crawford, Dade,

Dallas, Daviess, DeKalb, Dent, Douglas, Franklin, Gasconade, Gentry, Greene,

Harrison, Henry, Hickory, Holt, Howard,

Howell, Iron, Jackson, Jefferson, Johnson,

Knox, Laclede, Lafayette, Lewis, Linn, Livingston, Macon, Madison, Maries, Marion,

Miller, Moniteau, Monroe, Montgomery,

Morgan, Nodaway, Oregon, Osage, Perry,

Pettis, Phelps, Pike, Platte, Polk, Pulaski,

Putnam, Ralls, Randolph, Ray, Reynolds,

Ripley, Saint Clair, Sainte Genevieve, Saint

Francois, Saline, Schuyler, Scotland, Shannon, Shelby, Sullivan, Texas, Vernon, Washington, Wayne, Webster, Worth, and Wright.

Montana

Counties of Beaverhead, Big Horn,

Blaine, Broadwater, Carbon, Carter, Cascade, Chouteau, Daniels, Deer Lodge,

Fallon, Flathead, Gallatin, Garfield, Glacier, Granite, Hill, Jefferson, Judith Basin,

Lake, Lewis and Clark, Liberty, Lincoln,

McCone, Madison, Meagher, Mineral,

Missoula, Park, Phillips, Pondera, Powder

River, Powell, Ravalli, Richland, Roosevelt, Rosebud, Sanders, Sheridan, Silver Bow, Stillwater, Sweet Grass, Teton,

Toole, and Valley.

Nebraska

Counties of Adams, Antelope, Banner,

Blaine, Boone, Box Butte, Brown, Buffalo, Burt, Butler, Cass, Cedar, Cherry,

Clay, Colfax, Cuming, Custer, Dakota,

Dawes, Dawson, Dixon, Dodge, Douglas,

Fillmore, Franklin, Gage, Greeley, Hall,

Hamilton, Holt, Hooker, Howard, Jefferson, Kearney, Knox, Lancaster, Logan,

Loup, McPherson, Madison, Merrick,

Morrill, Nance, Nuckolls, Pierce, Platte,

Polk, Rock, Saline, Sarpy, Saunders,

Scotts Bluff, Seward, Sheridan, Sherman,

Sioux, Stanton, Thayer, Thomas, Thurston, Valley, Washington, Wayne, Webster, and York.

Nevada

County of Humboldt.

New Mexico

Counties of Bernalillo, Catron, Chaves,

Cibola, Colfax, Curry, DeBaca, Dona

October 21, 2024

Ana, Eddy, Grant, Guadalupe, Harding,

Hidalgo, Lea, Lincoln, Los Alamos, Luna,

McKinley, Mora, Otero, Quay, Rio Arriba,

Roosevelt, Sandoval, San Juan, San

Miguel, Santa Fe, Sierra, Socorro, Taos,

Torrance, Union, and Valencia.

New York

Counties of Cattaraugus, Genesee, Livingston, Monroe, and Wyoming.

North Carolina

Counties of Alamance, Alexander,

Alleghany, Anson, Ashe, Avery, Beaufort, Bertie, Bladen, Brunswick, Buncombe, Burke, Cabarrus, Caldwell, Caswell, Catawba, Chatham, Cherokee, Clay,

Cleveland, Columbus, Craven, Cumberland, Davidson, Davie, Edgecombe, Forsyth, Gaston, Graham, Granville, Greene,

Guilford, Harnett, Haywood, Henderson,

Hoke, Iredell, Jackson, Johnston, Jones,

Lee, Lenoir, Lincoln, McDowell, Macon,

Martin, Mecklenburg, Mitchell, Montgomery, Moore, New Hanover, Pamlico,

Pender, Person, Pitt, Polk, Randolph,

Richmond,

Robeson,

Rockingham,

Rowan, Rutherford, Sampson, Scotland,

Stanly, Stokes, Surry, Swain, Transylvania, Union, Vance, Warren, Washington,

Watauga, Wayne, Wilkes, Wilson, Yadkin, and Yancey.

North Dakota

Counties of Adams, Benson, Bottineau, Bowman, Burke, Cavalier, Divide,

Grand Forks, McHenry, McKenzie, Nelson, Pembina, Pierce, Ramsey, Renville,

Rolette, Towner, Walsh, Ward, and Williams.

Ohio

Counties of Adams, Athens, Belmont,

Brown, Carroll, Champaign, Clark,

Clinton, Coshocton, Delaware, Fairfield, Fayette, Franklin, Gallia, Greene,

Guernsey, Harrison, Highland, Hocking,

Jackson, Jefferson, Lawrence, Licking,

Madison, Meigs, Monroe, Montgomery, Morgan, Muskingum, Noble, Perry,

Pickaway, Pike, Ross, Scioto, Tuscarawas, Union, Vinton, Warren, and Washington.

October 21, 2024

Oklahoma

Tennessee

Counties of Alfalfa, Atoka, Beaver,

Beckham, Blaine, Bryan, Caddo, Canadian, Carter, Choctaw, Cleveland, Coal,

Comanche, Cotton, Craig, Custer, Dewey,

Ellis, Garfield, Garvin, Grady, Grant,

Greer, Harmon, Harper, Hughes, Jackson, Jefferson, Johnston, Kay, Kingfisher,

Kiowa, Latimer, Le Flore, Love, McClain,

McCurtain, Major, Marshall, Murray,

Noble, Nowata, Osage, Pawnee, Payne,

Pittsburg, Pontotoc, Pottawatomie, Pushmataha, Roger Mills, Seminole, Stephens,

Texas, Tillman, Washington, Washita,

Woods, and Woodward.

Counties of Anderson, Bedford, Benton,

Bledsoe, Blount, Bradley, Campbell, Cannon, Carroll, Carter, Cheatham, Chester,

Claiborne, Clay, Cocke, Coffee, Crockett,

Cumberland, Davidson, Decatur, DeKalb,

Dickson, Dyer, Fayette, Fentress, Franklin, Gibson, Giles, Grainger, Greene,

Grundy, Hamblen, Hamilton, Hancock,

Hardeman, Hardin, Hawkins, Haywood,

Henderson, Henry, Hickman, Houston,

Humphreys, Jackson, Jefferson, Johnson,

Knox, Lauderdale, Lawrence, Lewis, Lincoln, Loudon, McMinn, McNairy, Macon,

Madison, Marion, Marshall, Maury,

Meigs, Monroe, Montgomery, Moore,

Morgan, Obion, Overton, Perry, Pickett,

Polk, Putnam, Rhea, Roane, Robertson,

Rutherford, Scott, Sequatchie, Sevier,

Shelby, Smith, Stewart, Sumner, Tipton,

Trousdale, Union, Van Buren, Warren,

Wayne, Weakley, White, Williamson, and

Wilson.

Oregon

Counties of Benton, Clackamas, Clatsop,

Columbia, Coos, Crook, Curry, Deschutes,

Douglas, Gilliam, Harney, Hood River,

Jackson, Jefferson, Josephine, Klamath,

Lane, Lincoln, Linn, Malheur, Marion,

Morrow, Multnomah, Polk, Sherman,

Tillamook, Umatilla, Union, Wallowa,

Wasco, Washington, and Yamhill.

Pennsylvania

Counties of Bedford, Cambria, Fayette,

Franklin, Fulton, Greene, Indiana, Somerset, Washington, and Westmoreland.

South Carolina

Counties of Abbeville, Aiken, Allendale,

Anderson, Bamberg, Beaufort, Berkeley,

Calhoun, Cherokee, Chester, Chesterfield,

Clarendon, Colleton, Darlington, Dillon,

Dorchester, Fairfield, Florence, Georgetown, Greenville, Greenwood, Hampton, Horry, Jasper, Kershaw, Lancaster,

Laurens, Lee, Lexington, McCormick,

Marion, Marlboro, Newberry, Oconee,

Orangeburg, Pickens, Richland, Saluda,

Spartanburg, Sumter, Union, Williamsburg, and York.

South Dakota

Counties of Brookings, Butte, Custer,

Deuel, Fall River, Grant, Harding, Lake,

Lawrence, Lincoln, McCook, Meade,

Minnehaha, Moody, Oglala Lakota, Pennington, Perkins, Roberts, Turner, and

Union.

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Texas

Counties of Anderson, Andrews, Angelina, Aransas, Archer, Armstrong,

Atascosa, Austin, Bailey, Bandera, Bastrop, Baylor, Bee, Bell, Bexar, Blanco,

Borden, Bosque, Bowie, Brazoria, Brazos, Brewster, Briscoe, Brooks, Brown,

Burleson, Burnet, Caldwell, Calhoun,

Callahan, Cameron, Camp, Carson,

Cass, Chambers, Cherokee, Childress,

Clay, Cochran, Coke, Coleman, Collin, Collingsworth, Colorado, Comal,

Comanche, Concho, Cooke, Coryell,

Cottle, Crane, Crockett, Crosby, Culberson, Dallas, Dawson, Deaf Smith,

Delta, Denton, DeWitt, Dickens, Dimmit, Donley, Duval, Eastland, Ector,

Edwards, Ellis, El Paso, Erath, Falls,

Fannin, Fayette, Fisher, Floyd, Foard,

Fort Bend, Franklin, Freestone, Frio,

Gaines, Galveston, Garza, Gillespie,

Glasscock, Goliad, Gonzales, Grayson,

Gregg, Grimes, Guadalupe, Hale, Hall,

Hamilton, Hardeman, Hardin, Harris,

Harrison, Haskell, Hays, Hemphill,

Henderson, Hidalgo, Hill, Hockley,

Hood, Hopkins, Houston, Howard,

Hudspeth, Hunt, Irion, Jack, Jackson,

Jasper, Jeff Davis, Jeffe

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