This post is authored by Nicholas Lyskin (, Kristy Caron ( and Brian C. Bernhardt (

Most appraisers don’t go to prison, and those that do, don’t go for appraising. So it’s no wonder why much has been made of the one-year prison sentence recently handed down to Walter Roberts II, an appraiser who pleaded guilty to committing tax fraud on the grounds that he knowingly inflated at least 18 of his appraisals.

However, Mr. Roberts II is not going to prison for simply producing appraisal reports containing valuations that the IRS disagreed with, but rather for falsifying documents, making false statements, and manipulating data in order to produce those inflated appraisal reports (reports supporting over $1.8 billion of claimed tax deductions). To be sure, there was no similar evidence against Clay Weibel, an appraiser criminally charged in a related case, and the presiding jury acquitted Mr. Weibel of all charges. In other words, although Mr. Roberts II and Mr. Weibel both produced several appraisals with which the IRS took issue, a distinction lies in the fact that Mr. Weibel proved that he reached his conclusions in good faith.

This distinction will be important to remember in the coming months and years, as the IRS has shown no sign of slowing its nationwide campaign against all syndicated donations of conservation easements. And while the IRS will make multiple and different arguments in any given case involving a conservation easement donation, taxpayers can always count on the IRS to argue that the appraiser inflated the fair market value of the conservation easement.  Courts, and specifically the Tax Court, are not yet taking into account, however, that the IRS supports its valuation arguments by employing an approach to valuation that is fundamentally different than the one employed by the taxpayers’ appraisers.  

For example, the value of a conservation easement is determined by discerning the “before and after” values of the property, in other words, what the taxpayer is giving up by agreeing never to develop their property, see e.g., Champions Retreat Golf Founders, LLC v. Commissioner, T.C. Memo. 2022-106 (“Our next step is to determine the fair market value of the property as if put to its highest and best use.”). This is where the fundamental disagreement lies between the taxpayers’ appraisers and the IRS.

On the one hand (and so long as certain criteria are met), taxpayers’ appraisers will value the highest and best use of the property as if it were developed (examples include a housing development, mining operation, etc.). On the other hand, the IRS will first disagree with whatever the taxpayers’ appraisers determine is the highest and best use of the developed property, then it will value the property as is (e.g., raw land to be held for agricultural purposes). Of course, the IRS’s approach results in a significantly lower value.            

In our experience (supported by various Tax Court decisions[1]), taxpayers’ appraisers are on the correct side of this fundamental disagreement. But, regardless, the point is that—at worst—this fundamental disagreement is a good faith disagreement. Given the IRS’s aggressive approach of disallowing all syndicated conservation easement donations, however, taxpayers should remain cognizant that the IRS may attempt to blur the lines between appraisers like Mr. Roberts, II, a lone appraiser acting fraudulently, and taxpayers’ appraisers as a whole acting in good faith with whom the IRS simply disagree.

[1] See e.g., William A. Stone III, SCETs: Do Tax Court Valuations Reflect Government Rhetoric?, Tax Notes (Aug. 29, 2020), available at SCETs: Do Tax Court Valuations Reflect Government Rhetoric? | Tax Notes.