Diesel hit a record national average of $5.85 a gallon this week, up more than $2 since January. Farm bankruptcy filings nationally reached a six-year monthly high in April. South Jersey owners feel this before the headlines do, and most have no one to call who knows both the numbers and the law.
Here is the pattern I see repeat. An owner who cannot cover payroll pays the net wages, holds back the withheld taxes, and plans to catch up next month. Those withheld dollars were never company money. The IRS can assess them personally against the owner under the trust fund recovery penalty, they survive bankruptcy, and a long enough pattern stops being treated as a cash-flow problem and starts being treated as intent.
Every one of those stages has an exit, and the exit is widest at the beginning. Installment agreements, penalty relief, and a documented change of course are all still available to an owner who moves early. They narrow considerably for an owner who waits.
This past week I heard stories from two local business owners who wasted money on expensive legal solutions that will not solve their problems. They did not want to talk with anyone about their business problems, and this led to poor, emotionally-driven actions that hurt rather than helped.
If your business is under this kind of pressure, text me the words BUSINESS STRESS to 856-314-5625. Please send no details by text. I will call you, at no cost and with no obligation, and if what you describe belongs with an attorney first, a business change, debt restructuring, or tax resolution. If I think you should consider something else, I will tell you that too.
Category: sustainability
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You don’t have to deal with business stress alone
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Most Conservation Easements Are Not Tax Dodges
On August 19 the IRS announced that it is starting up an Office of Conservation Easements. The release opens by recognizing the important role conservation and historic preservation easements can play. Buried in a procedural announcement about winding down a settlement initiative, that clause is worth pausing on, because somewhere over the last decade the tax profession stopped believing it.
Say “conservation easement” in a room of accountants now and watch the temperature drop. The phrase has become shorthand for a tax scheme. That reaction is understandable but it is wrong, and the cost of it falls on people who never had anything to do with the bad deals that caused it.
The category is much bigger than the enforcement docket
Land trusts have conserved over 60 million acres of private land in this country, more acreage than all national parks combined. The overwhelming majority of that came from ordinary landowners: farm families, woodlot owners, people with a creek or a marsh edge who did not want to see it filled. They worked with accredited nonprofits that recorded the easement at the county level, and monitor it over time. I can see that conservation easements are extremely important to the sustainability of rural South Jersey, especially the bayshore where I live and invest.
To my knowledge, the IRS enforcement wave never challenged the local private conservation easements in rural South Jersey. Instead, IRS targeted a narrow band of syndicated and promoted partnership transactions where the claimed deduction ran several times what the land cost. Congress then wrote a limit into the statute aimed at exactly that structure. The problem got a name, an enforcement program, and now an office.
What it did not get is a clear public line between the promoted deals and everything else. So the whole category absorbed the reputation of the small worst slice of it.
Around here, this is not theoretical
Cumberland County NJ is one of the places where private land conservation actually does the work that government cannot afford to do outright.
We have marsh and buffer land along the Delaware Bay, Maurice River and the Cohansey River that will never be developable and is not worth much on the open market, but is worth a great deal ecologically. We have farms with soils good enough that losing them to warehouses would be permanent. We have upland edges that determine whether the marsh behind them can migrate as the water rises, which is the single most consequential land question on this bayshore and almost nobody is discussing it in those terms.
Some of that gets protected through fee purchase: Green Acres, Blue Acres, county open space. Some through federal wetland reserve easements. Some through the state farmland preservation program. And some through donated conservation easements to accredited land trusts, including organizations that have been working in this county for decades.
Those are different tools with different tax consequences. Lumping them together under a suspicion inherited from a promoted-deal scandal is not conservatism. It is a failure to read the file.
What the reputation actually costs
Here is the part I want tax practitioners to consider. I doubt many of us actually believe every conservation easement is abusive. What happened was quieter than that. Reporting obligations, preparer penalty exposure, and the sheer aggravation of the subject made it expensive to touch. So practitioners like me mostly stopped raising it as a planning option at all.
That is avoidance by liability management, not by professional judgment. And the person who pays for it is a landowner in Downe Township (where I live) or Greenwich or Stow Creek who had a decision in front of her, never learned the option existed, and sold to whoever showed up.
If you own land here and are thinking about this
Start with the land trust, not with the deduction. If a reputable, accredited organization does not want the easement, that answers a question. Get a qualified appraisal from an appraiser who has actually done conservation work, not a general commercial appraiser. Have a lawyer read the deed language closely, because legitimate donors have lost entire deductions over a single clause about what happens if the easement is ever extinguished.
And know this one: if you are granting the easement to obtain a permit or a development approval, you got something in return, and the charitable deduction shrinks or disappears. Real conservation value, no write-off. That trips up more honest people around here than any promoted scheme ever did.
The tax benefit should be the last question, not the first. That has always been the difference between a conservation easement and a tax product. It is not a hard distinction to see. We just stopped looking.