Historic Preservation and Land Conservation Certainty Act
- Bill Number
- H.R. 9398
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Government Operations and Politics
- Status
- Introduced
- Latest Action
- 2026-06-23: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-07-07T17:10:58Z
AI-Generated Summary
Purpose This legislation establishes a voluntary election process for certain partnerships to resolve open federal income tax controversies related to donations of conservation easements. It also updates standards for identifying "contributing buildings" in historic districts under the Internal Revenue Code.
Key Provisions
- Section 2 creates an election available during a 180-day period after enactment for partnerships with "eligible contributions" (qualified conservation contributions claimed on returns for years ending on or before December 31, 2024) that have an "open matter" (unexpired assessment period or ongoing IRS review, appeal, or litigation).
- The electing partnership files a statement with the IRS, pays a "settlement amount," and accepts a reduced deduction limited to a "settlement limitation amount" (generally 2.5 times partners' relevant basis, or 3.2 times capital contributions in certain cases).
- The settlement amount consists of a tax component (excess deduction multiplied by the highest individual tax rate) plus a penalty component (based on accuracy-related penalty rates under section 6662).
- Special rules address common marketing groups (treated as a single unit with joint and several liability), non-contributing partners (who may face separate assessments), coordination with prior settlements or court decisions, and limited IRS review only for computational accuracy.
- An effective election is treated as a closing agreement, waives rights to contest amounts, and suspends certain limitation periods.
- Section 3 amends sections 170(h)(4)(C) and 47(c)(3) to replace the prior certification requirement for buildings in historic districts with a "contributing building" standard based on identification in National Register documentation or equivalent records.
Significant Changes to Existing Law
- Introduces a new, time-limited settlement mechanism outside standard IRS deficiency or partnership audit procedures for specific conservation easement disputes.
- Modifies the definition of qualifying historic structures for charitable contribution and rehabilitation credit purposes, shifting from Secretary of the Interior certification to documentation-based identification.
- Provides that the election resolves liability for the excess deduction without requiring IRS acceptance or further substantive review.
Potential Impacts
- Government agencies: Allows the IRS to close certain open cases through a standardized payment process rather than full examinations or litigation; limits review to computational issues.
- Citizens: Enables affected partnerships and their partners to resolve disputes by paying a calculated amount and accepting a capped deduction; non-contributing partners may face separate assessments with limited contest rights.
- International relations: No direct effects identified in the legislation.
- The changes apply retroactively to open tax years and pending proceedings but do not affect closed cases.
Main Stakeholders Affected
- Partnerships and ultimate taxpayer partners who claimed deductions for eligible conservation easement contributions with open matters.
- Common marketing groups and their organizers or managers.
- The Internal Revenue Service (for administration and collection).
- Donees of the easements (such as land trusts or historic preservation organizations).
- Pass-through entities and individuals who received allocations of the deductions.
Notable Legal, Constitutional, or Political Implications
- The election is irrevocable, binding on all related parties, and treated as a closing agreement under section 7121, with explicit waivers of administrative and judicial contest rights.
- Assessment and collection of settlement amounts occur in the same manner as chapter 1 taxes, with interest waivers for timely payments and extended limitation periods for non-contributing partners.
- The legislation preserves other penalties for third parties and states that no inference is created regarding the proper tax treatment of non-electing contributions.
- Effective dates vary: Section 2 applies to elections filed within the specified period; Section 3 amendments apply to open years for the contribution deduction and to later years for the rehabilitation credit.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-06-23: Referred to the House Committee on Ways and Means.
- 2026-06-23: Introduced in House
- 2026-06-23: Introduced in House
Bill Versions
- Historic Preservation and Land Conservation Certainty Act — issued 2026-06-23 — PDF (31 pages)