Charles R. Irby and Irene Irby v. Commissioner, 139 T.C. 371

Irby Ranches, LLC conveyed two conservation easements to Colorado Open Lands (COL) in bargain sale transactions funded by FRPP, GOCO, and Gunnison County grants.
West parcel easement (197 acres) funded in 2003; East parcel easement (456 acres) funded in 2004; restrictions protect conservation purposes in perpetuity.
Easements include revenue-sharing provisions upon future condemnation, with COL to receive a portion after reimbursements to government funding sources.
Petitioners reported gains and charitable contributions on 2003 and 2004 returns; Colorado Open Lands held the easements and COL’s obligations to repay grants.
Respondent disallowed charitable contribution deductions claiming the charitable purpose was not protected in perpetuity and that appraisal and substantiation did not meet regulation requirements.
Key issues framed for trial: perpetuity of conservation purpose, qualification of the appraisal, and substantiation under 170(f)(8).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Perpetual protection of conservation purpose	Irbys insist easements preserve conservation in perpetuity per 170(h)(5).	Provisions allowing reimbursement to grantors undermined perpetual protection.	Easements’ perpetual protection satisfied 170(h)(5) and regs.
Qualification of appraisal under 1.170A–13(c)(3)	Butler's appraisal included necessary details and purpose under DEFRA and subsequent regs.	Appraisal did not explicitly state it was prepared for income tax purposes.	Appraisal met the qualified appraisal requirements.
Contemporaneous written acknowledgment under 170(f)(8)	Documents collectively constitute a contemporaneous written acknowledgment.	Some documents alone may be insufficient; documentation must specify no goods/services if applicable.	Petitioners satisfied contemporaneous written acknowledgment requirements.

Kaufman v. Commissioner, 687 F.3d 21 (1st Cir. 2012) (affirmed windfall/extinguishment principles in conservation context)