Federal Interest Abatement Consulting
Federal law requires the IRS to stop the accrual of interest during declared disasters — including the Covid pandemic. If you owe back taxes from a conservation easement investment, you may qualify for significant interest abatement.
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Over the past decade, the IRS has aggressively challenged syndicated conservation easement transactions, claiming that thousands of easements have little to no value while slashing tax deductions and imposing penalties. The Tax Court judges have now agreed to follow the IRS' latest arguments, which is likely to hurt thousands of taxpayers. Investors who participated in these arrangements face substantial tax bills — often including years of accrued interest on top of the underlying tax owed.
The IRS launched a formal settlement program for conservation easement cases, and many investors have accepted or are considering settlement. What most tax advisors fail to address — and what the IRS will not volunteer — is that a significant portion of the interest charged may be legally unenforceable.
Under federal law, interest does not accrue on tax liabilities during periods covered by a federal disaster declaration. The Covid-19 pandemic was declared a federal disaster, and the IRS itself suspended certain deadlines during that period. Yet interest continues to appear on settlement notices as if no suspension occurred.
We exist to close that gap. We work exclusively with investors to identify, document, and formally claim the interest relief they are legally entitled to — relief that can amount to tens or hundreds of thousands of dollars per taxpayer.
Our Services
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We begin with a thorough review of your tax position, the tax periods at issue, and the applicable federal disaster declarations. We determine the interest that should have been suspended and was not.
We then prepare and file an IRS Claim for Refund and Request for Abatement — along with a comprehensive legal memorandum documenting your entitlement to relief under IRC § 7508 and applicable interest abatement provisions.
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The IRS does not always grant abatement requests on the first filing. If your claim is denied — in whole or in part — you have the right to appeal that determination, and we will exercise it on your behalf.
We prepare a formal protest to the IRS Office of Appeals, present the legal and factual basis for your claim, and advocate through the administrative process until your relief is granted or all options are exhausted.
The Legal Basis
Internal Revenue Code § 6404(e) grants the IRS authority to abate interest that accrues as a result of IRS error or delay. More broadly, federal disaster relief statutes — including those invoked during the Covid-19 pandemic — expressly suspend the accrual of interest on tax liabilities during the covered period.
On March 13, 2020, President Trump declared a national emergency under the Stafford Act in response to the Covid-19 pandemic. The IRS subsequently issued Notice 2020-18 and related guidance, extending filing and payment deadlines. Under the applicable statutes, interest does not accrue on liabilities that fall within the scope of those extensions.
For conservation easement investors whose tax liabilities span the 2020–2023 period, this means that a portion of the interest shown on their IRS settlement notices may never have been legally owed. The IRS calculates interest automatically — it does not proactively apply disaster relief suspensions. The burden falls on the taxpayer to file a formal claim.
"Interest that accrued during a federal disaster period is not legally owed — but the IRS won't remind you."
Our Process
We review your settlement documentation, identify the tax periods at issue, and assess your eligibility for interest relief. No obligation, no cost.
We prepare your Form 843 and supporting legal memorandum, documenting the precise interest that should have been suspended and filing your claim with the IRS.
We monitor your claim and respond to any IRS correspondence. If your claim is denied, we file a formal appeal and see the process through to conclusion.
Get Started
Tell us about your situation. We'll review it and respond within one business day.