Pollard v. Comm'r
2013 T.C. Memo. 38
Tax Ct.2013Background
- Petitioner Pollard granted a conservation easement to Boulder County in 2001-2003 in connection with a subdivision exemption for his Boulder County farmland.
- Respondent disallowed the charitable deduction under section 170, arguing the easement had no charitable value due to a quid pro quo.
- The parties submitted two deficiency notices: for 2003–2004 and for 2005–2007, with penalties contemplated under section 6662(a) and (h).
- The court found that the two easements were part of a quid pro quo to obtain a subdivision exemption and thus not a charitable contribution.
- Petitioner claimed deductions based on a before/after appraisal of the easement value, with conflicting appraisals presented by petitioner’s and respondent’s experts.
- Ultimately the court held the grant did not qualify as a charitable contribution and sustained respondent’s deficiencies and penalties.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the conservation easement qualifies as a charitable contribution | Pollard asserts the easement is a qualified conservation contribution. | Commissioner contends the easement was part of a quid pro quo for the subdivision exemption. | No; the easement was a quid pro quo and not a deductible charitable contribution. |
Key Cases Cited
- Hernandez v. Commissioner, 490 U.S. 680 (U.S. 1989) (distinguishes gifts from payments with a financial return)
- Christiansen v. Commissioner, 843 F.2d 418 (10th Cir. 1988) (donor motives and external transaction features relevant to deductibility)
- Graham v. Commissioner, 822 F.2d 844 (9th Cir. 1987) (gifts require detached and disinterested motives)
- United States v. Am. Bar Endowment, 477 U.S. 105 (U.S. 1986) (sine qua non of charitable contribution is transfer without consideration)
- Hilborn v. Commissioner, 85 T.C. 677 (T.C. 1985) (valuation methodologies in before/after analyses)
- Wichita Terminal Elevator Co. v. Commissioner, 6 T.C. 1158 (T.C. 1946) (burden of proof and reliance considerations at penalty stages)
- Neonatology Assocs., P.A. v. Commissioner, 115 T.C. 43 (2000) (reasonable reliance on professional advice under penalties)