Submitted: February 7, 2017
for Review of an Order of the Commissioner of Internal
SMITH  , BENTON and SHEPHERD, Circuit
BENTON, Circuit Judge.
Golf, LLC claimed a charitable deduction of $16.4 million on
its 2003 tax return for donating an easement to the Platte
County Land Trust (PLT). The Commissioner of Internal Revenue
disallowed the deduction, finding RP Golf did not make a
"qualified contribution easement" under 26 U.S.C.
§ 170(b)(1)(E). After trial, the tax court ruled for the
Commissioner. RP Golf, LLC v. Comm'r, 111 T.C.M.
(CCH) 1362 (2016). Having jurisdiction under 26 U.S.C. §
7482, this court affirms.
and 1998, RP Golf acquired land in Platte County, Missouri.
It developed two private golf clubs, The National and The
Deuce. To fund the purchase, RP Golf obtained loans from two
banks: Hillcrest and Great Southern. Hillcrest financed the
original purchase in 1997. Great Southern gave a development
loan in 2001. Both loans were secured by deeds of trust in
December 2003, RP Golf granted a permanent conservation
easement to PLT, a Missouri not-for-profit corporation. The
easement's purpose was to "further the policies of
the State of Missouri designed to foster the preservation of
open space and open areas, conservation of the state's
forest, soil, water, plant and wildlife habitats, and other
natural and scenic resources."
April 14, 2004, Great Southern and Hillcrest signed
subordinations of their mortgages to PLT's right to
enforce the easement. Both subordinations state an effective
date of December 31, 2003. Also on April 14, RP Golf filed
its 2003 partnership tax return claiming a $16.4 million tax
deduction for the easement.
Commissioner disallowed RP Golf's $16.4 million
charitable deduction, claiming it did not meet the
requirements for a "qualified conservation
contribution" under 26 U.S.C. § 170(b)(1)(E). RP
Golf challenged the Commissioner's decision in tax court.
After trial, the tax court found RP Golf's easement was
"not protected in perpetuity, and, therefore, was not a
qualified conservation contribution." RP Golf appeals.
court reviews decisions of the tax court "in the same
manner and to the same extent as decisions of the district
courts in civil actions tried without a jury."
Nelson v. Comm'r., 568 F.3d 662, 664 (8th Cir.
2009). Factual findings are reviewed for clear error, and
legal determinations de novo. Scherbart v.
Comm'r, 453 F.3d 987, 989 (8th Cir. 2006).
sought the charitable tax deduction for a "qualified
conservation contribution." 26 U.S.C. §
170(b)(1)(E). A "qualified conservation
contribution" is a contribution of 1) a real property
interest, 2) to a qualified organization, 3) exclusively for
conservation purposes. 26 C.F.R. § 1.170A-14(a). Only
the third requirement is at issue here: whether the property
was donated "exclusively for a conservation
conservation purpose must be "protected in
perpetuity." 26 U.S.C. § 170(h)(5)(A). "The
Code does not define the phrase 'protected in perpetuity,
' or otherwise describe how a taxpayer may accomplish
this statutory mandate." Mitchell v.
Comm'r, 775 F.3d 1243, 1247 (10th Cir. 2015). The
Commissioner's regulations elaborate on the
protected-in-perpetuity requirement. See Comm'r v.
Engle, 464 U.S. 206, 226-27 (1984) (recognizing that 26
U.S.C. § 7805 authorizes the Commissioner ...