Applying the Private Benefit Doctrine to Farmland Conservation Easements

Farmland or working-land conservation easements serve two purposes. One is charitable, to protect open space from development; the other is practical, to preserve the land in productive agricultural use. These purposes, however, create a tension in the easement itself that can force the land trust that holds the easement to choose between the two purposes when the easement, meant in part to protect the farm, threatens the farm\u27s continued viability. Neutral-impact amendments are amendments to working-land easements that allow farmers to improve farm production or viability without harming the conservation value of the easements. Such amendments seem beneficial: a land trust can advance one of its goals of keeping agricultural land productive–without sacrificing the other goal of preserving the conservation value of the land. By approving such an amendment, however, a land trust likely violates the private benefit doctrine and risks losing its tax-exempt status. This Note argues that the IRS should explicitly decide not to apply the private benefit doctrine to neutral-impact amendments of farmland and working-land conservation easements