Recently the Department of Revenue of the State of South Carolina sent out a "Desk Audit Letter" asking for information about conservation easement donations in that state. This is a very interesting way of gathering information, and, with the permission of the Department, Steve is posting this letter on this site.
July 8, 2004
Re: Land Trust Desk Audit
To Whom It May Concern:
Below you will find the Department of Revenue's annual desk audit of land trusts who have accepted conservation easements or deeds to property for conservation purposes in South Carolina. We understand your group meets this test. (Please advise if you do not.) Unless otherwise indicated, the audit seeks information for the calendar years 1999-2003. Of course, for land trusts who do business in more than one state, the audit seeks information only on the properties located in South Carolina.
Please provide the information requested below by September 1, 2004.
Please let us know if responding to any particular item(s) will cause your organization undue burdens. If so, let us know what information you can readily make available, and we will be happy to discuss alternatives.
A. LAND TRUSTS
1. How long has your organization existed?
2. Please include a copy of your IRS letter of determination stating that you are a tax-exempt organization, if applicable.
3. How long has your organization accepted easements or donations of real property?
4. How many easements do you currently hold?
5. How many pieces of property does your organization own for conservation purposes (in lieu of a conservation easement)?
6. Please list the names of all full time employees from 2001-03.
7. List any ongoing financial arrangements or consulting agreements the land trust has with any outside consultants, specifically including appraisers.
B. CONSERVATION EASEMENTS
8. Please list the names and contact information of all private donors of conservation easements or outright grants of land to your land trust from 1998-2003.
9. Please attach copies of all IRS form 8283 for any easements or property you received from 1998-2003.
10. Please attach copies of all IRS form 8282 for any easements or property you resold from 1998-2003.
11. Please list any documents in your possession relating to baseline data for each easement received by your organization from 2001-2003.
C. ENFORCEMENT
12. Please list all permanent employees, volunteers or independent contractors who perform observation, inspection or otherwise police the easements your organization holds.
13. Please attach copies of the portions of your Articles, Bylaws or Resolutions which pertain to enforcement of conservation easements.
14. Please list in detail any and all inspections of property covered by a conservation easement which the land trust performed (either by itself or through independent contractors) from 2001-03 to ensure compliance with the terms and conditions of the easement.
15. Please provide any other services or steps that your organization takes to monitor or police the conservation easements you hold.
16. Please list all income and expenses for the land trust for 2002-2003.
17. Please estimate which portion of the expenses listed above was spent on monitoring or enforcing conservation easements.
18. Please list any breaches, misuses or other discrepancies you have observed in the enforcement of any easement agreement from 2000 to 2003.
D. CONFLICTS OF INTEREST
19. List the conservation easements or deeds to property which the land trust received from persons who were Board Members, officers, directors or employees of the land trust either at the time of the creation of the conservation easement or transfer of the deed or within one year before or after.
20. If the land trust received conservation easements from Board Members, officers or employees as discussed above, attach copies of all Policies and Procedures adopted by the trust which govern conflicts of interest, Code of Ethics or the like.
21. For 2001-03, list the names of any Board Members, Officers, or Directors (e.g., lawyers, accountants, appraisers, realtors, developers) who represented clients who gave conservation easements to the land trust during their service as a Board Member, Officer, or Director.
E. SELECTED TRANSACTIONS
22. Please list and give details on any easement where you (Board Members, Officers or Directors) had actual knowledge that the conservation easement was granted pursuant to a proposed development for residential, commercial or similar use of the remaining portion of the property not covered by the easement.
23. Please list the names and contact information of all donors of conservation easements or outright grants of land to your land trust in connection with any residential or commercial development, specifically including residential subdivisions and golf courses from 1998-2003, and attach a copy of the easement.
24. Please list all easements on property which is five acres or less.
25. Please identify by (attempted) donor name and property any conservation easements which the land trust declined to accept from 2000-03.
Please note the Department of Revenue will soon publish the 2nd edition of Local, State, and Federal Tax Incentives for Conservation Easements. Please let us know if you would like to be emailed a copy either in draft or in final version.
Yours Very Truly,
Burnet R. Maybank, III
Director, SC Dept. of Revenue
