- Associated Press - Sunday, December 21, 2014

DENVER (AP) - Some Colorado property owners and hundreds of investors who took advantage of a program to preserve millions of acres of land in return for state income-tax credits could be forced to repay as much as $220 million in back taxes because the state ruled the land isn’t worth what the landowners claimed.

Rocky Ford hay farmer Timothy Crow said he could be forced into bankruptcy.

“This was supposed to be a good thing for everyone,” Crow said of the state’s conservation easement program, where land-rich but cash-poor ranchers and farmers like him can preserve their property forever in return for needed income.

Crow and thousands of others preserved millions of acres of land in return for state income-tax credits they could either sell for cash or use to pay their own income tax bill.

At issue are nearly 500 conservation easements like Crow’s, the bulk of them donated between 2003 and 2007, that were created under a state law that for years had no oversight.

Many landowners went into the program honestly, but they relied on appraisers who used flawed methods of calculating land values. The problems have also hurt investors who bought the credits.

“This just stinks all the way around,” said Fort Collins businessman Michael McCurdie, who is facing a $100,000 bill for back taxes and penalties because he bought $65,000 in easement credits in 2003.

State officials say they’re just collecting taxes due, the Denver Post reported Sunday (https://tinyurl.com/kbfj5t3).

“They were private deals negotiated by private parties, and as with any investment there is risk,” Colorado Department of Revenue spokeswoman Daria Serna said in an email to The Denver Post.

The conservation easement program was to be a multiple benefit for Coloradans.

“You want landowners to put their property into easements. That’s what makes our state beautiful. That’s a win,” McCurdie said. “And the tax credit helps us, the taxpayer, facilitate it. Everyone is winning.”

To date there have been 4,243 easement donations covering nearly 2 million acres of land.

In dozens of cases, tax-credit buyers have been told they can either repay the original amount of income tax they owed from as long as a decade ago, with penalties and interest forgiven, or fight it out and risk hefty add-ons later.


Information from: The Denver Post, https://www.denverpost.com

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