Did you invest in a worthless or high-risk conservation easement?
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As reported in InvestmentNews, three Raymond James entities have agreed to pay over $15 million to resolve an investigation by the SEC. The settlement and SEC order focused on Raymond James’s actions in improperly charging certain clients advisory fees when the...read more
Did you buy a conservation easement investment from a financial advisor or stockbroker? If so, your investment may be worthless if the conservation easement was overvalued based on an improper appraisal – a practice that may be rampant in the industry. It could also trigger back taxes, penalties, interest, and a potential audit by the IRS.
Our law firm is investigating financial advisors and brokers who sell these conservation easement investments, and we may be able to help you recover your losses.
These investments are marketed as lucrative tax haven investments, with promises of an immediate return of 40% or more while also benefitting the environment.
Financial advisors and brokers selling these conservation easement investments often receive large commissions of 10% to 12% from the investments’ sponsors and may not be disclosing the true risks of these investments to investors.
As these conservation easement investments gain in popularity, the IRS has begun cracking down on them. In a recent federal lawsuit filed in Georgia, the government accused EcoVest Capital and a group of individuals of selling or promoting 96 conservation easement investments that led to $2 billion in unlawful tax deductions. The case turns on alleged grossly inflated appraisals of the value of conservation easements.
Our firm has published a detailed analysis of the case, which can be found here.
Even before the EcoVest Capital lawsuit, the IRS ruled that certain conservation easement investments are now a “listed transaction.” The IRS is specifically targeting conservation easement investments that claim to generate tax benefits of 2.5 times the invested amount. The IRS’s notice can be found here. In essence, the IRS ruled that these conservation easement investments are substantially similar to other schemes that the IRS have determined to be unlawful tax shelters.
The IRS heavily scrutinizes all listed transactions through its Office of Tax Shelter Analysis. Listed transactions place strict reporting requirements on participants, who may be subject to heavy fines and penalties for non-compliance. Further, listed transactions greatly increase the odds that the deductions they generate will be challenged, meaning taxpayers could face paying back taxes, penalties, interest, and greatly increase their risk of being audited.
The fact that many of these high-risk conservation easement investments were sold to investors through financial advisors and stockbrokers, and not by the sponsors directly, may open up an avenue of relief. Through a process called FINRA arbitration, investors who purchased these investments may be able to file a claim against the brokers or advisors and their firms to receive an award for damages.
If you or a loved one purchased a conservation easement investment through a financial advisor or stockbroker, we urge you to contact our office to see if you have a potential claim for damages.
The attorneys at Epperson & Greenidge have extensive experience within FINRA and we specialize in bringing these claims on behalf of investors. We also have specific experience representing clients who have invested in private placements and tax shelters. We accept cases on a contingency basis: we only get paid if and when you collect money. Time to file your claim may be limited, so call 877-445-9261 now to speak to an attorney for a free consultation.