CERI Act of 2026
- Sponsor
- Rep. Bergman, Jack [R-MI-1]
- Committees
- Ways and Means Committee (primary)
- Last action
- Sep 21, 2026
Bottom line
The bill aims to resolve a backlog of contentious IRS disputes over syndicated conservation easements by offering a structured settlement program and clarifying tax code provisions, potentially reducing liabilities for taxpayers and altering future conservation easement valuations.
What it actually does
This bill establishes a new Conservation Easement Resolution Program within the Treasury Department to settle disputes related to syndicated conservation easements (SCEs) claimed before December 30, 2022. It sets specific, often taxpayer-favorable, terms for these settlements, including limitations on assessing deficiencies and penalties, and mandates significant reductions for certain non-qualified easements. Additionally, it amends the Internal Revenue Code to clarify valuation rules for conservation easements, particularly regarding extinguishment proceeds and the consideration of highest and best use, and shifts the burden of proof in valuation disputes to the IRS.
Proponents argue
Supporters argue the bill provides much-needed clarity and fairness to taxpayers caught in complex and often contentious disputes with the IRS over conservation easements. They contend that the IRS's aggressive enforcement actions have been overly broad, penalizing legitimate conservation efforts alongside potentially abusive schemes. The bill ensures that genuine conservation purposes are recognized, provides a pathway to resolution, and aims to prevent the IRS from retroactively applying guidance while upholding taxpayer rights, particularly regarding valuation and good faith filings.
Opponents contend
Critics might argue that the bill could be seen as a 'bailout' for wealthy individuals who engaged in potentially abusive tax shelters disguised as conservation efforts. They might contend that relaxing penalties and shifting the burden of proof for valuation could undermine the IRS's ability to combat tax fraud and protect the integrity of the tax system. Concerns could also be raised that the bill's provisions, particularly on valuation and the treatment of Form 8886 filings, could encourage future aggressive tax planning in this area by reducing the associated risks.
The bill is relatively short and its core provisions are understandable, making it accessible for an informed reader to evaluate within a reasonable timeframe.
Section 2(a)
Establishment of Conservation Easement Resolution Program (CERP)
This section mandates the Secretary of the Treasury, in consultation with the National Taxpayer Advocate, to establish a program within 180 days of enactment. This program is designed to provide a structured mechanism for resolving disputes related to syndicated conservation easement transactions for which deductions were claimed before December 30, 2022, aiming to bring certainty to a contentious area of tax law.
Supporters argue
Supporters argue this program is essential to clear a backlog of tax disputes, offering certainty and fairness to taxpayers who have been in prolonged litigation or audit with the IRS. It provides a structured approach to resolve complex cases, reducing administrative burden for both taxpayers and the government.
Critics contend
Critics might contend that creating a special settlement program could be seen as preferential treatment for a specific class of taxpayers, potentially undermining the general enforcement of tax law and setting a precedent for other types of tax disputes.
Tradeoffs
This provision balances the need for efficient dispute resolution and taxpayer certainty against concerns about equitable treatment across all tax disputes and the perception of leniency towards certain tax planning strategies.
Section 2(b)
Moratorium on New Disputes and Tolling of Statute of Limitations
During the period from the bill's enactment until the Conservation Easement Resolution Program is established, the IRS is prohibited from initiating new disputes regarding covered transactions. Additionally, the statute of limitations for existing disputes related to covered transactions will be paused, preventing cases from expiring while the settlement program is being prepared.
Section 2(c)
Structured Settlement Terms and Penalty Reductions
This section outlines specific settlement terms. For 'qualified easements' (those meeting criteria like perpetuity and active monitoring), the IRS cannot assess deficiencies or penalties unless specific issues exist (e.g., donee not qualified, easement not perpetual, no qualified appraisal, fraud, or gross valuation misstatement). For non-qualified easements where conservation purposes are substantially preserved, deficiencies, penalties, or interest must be reduced by at least 80 percent. Furthermore, no penalties under sections 6662, 6662A, or 6663 of the Internal Revenue Code may be imposed.
Section 2(c)(2)
Strict Standards for Proving Fraud
This provision sets a high bar for the IRS to prove 'knowing participation in a fraudulent transaction.' It requires direct, documented evidence of the taxpayer's own intentional and willful conduct, explicitly excluding constructive knowledge, negligence, recklessness, or third-party conduct unless the taxpayer had actual knowledge and willfully participated. It also states that fraud cannot be based solely on technical non-compliance, valuation methodology differences, reliance on qualified appraisals, or deviations from administrative guidance later invalidated.
Section 2(f) and Section 4(a)
Enhanced Taxpayer Protections for Conservation Easement Valuations
For covered transactions, and generally for conservation easements under Section 170(h) of the Internal Revenue Code, there will be a rebuttable presumption that the value determined by a taxpayer's qualified appraisal is accurate. The IRS must provide 'clear and convincing evidence' to rebut this presumption and must produce its own qualified appraisal with detailed methodology, comparable sales, assumptions, and an analysis of highest and best use (including mineral rights if applicable).
Section 2(h)
Protection for Taxpayers Who Filed Form 8886
Taxpayers who filed Form 8886 for a covered transaction are conclusively presumed to have acted in good faith and without actual knowledge of fraud. The IRS cannot use such filings as evidence of fraud or to deny relief. Furthermore, no audit or penalty can be initiated solely based on compliance with Form 8886 disclosure requirements related to Notice 2017-10 (or similar invalidated guidance), and timely filing constitutes mitigating evidence in disputes.
Section 3
Clarification on Extinguishment Proceeds and Perpetuity Requirement
This section amends Section 170(h)(5)(A) of the Internal Revenue Code to clarify that a conservation purpose is not considered to fail the 'protected in perpetuity' requirement merely because an agreement specifies how post-donation improvements are treated when calculating extinguishment proceeds. This change applies retroactively to transactions entered into after December 31, 2009.
Section 4(a)
Mandating Consideration of Highest and Best Use in Valuation
This section amends Section 170(h) to explicitly state that the highest and best use of property subject to a qualified conservation contribution must be taken into account for valuation purposes, in accordance with generally accepted appraisal standards. This includes potential uses like mineral extraction, mining, quarrying, oil and gas development, or other development of mineral rights, provided such use is physically possible, legally permissible, financially feasible, and maximally productive.
The amendment regarding the allocation of extinguishment proceeds (Section 3(a)) applies to transactions entered into after December 31, 2009.
Section 3(b)
Why it matters:Standard legislative practice for specifying the effective date and applicability of statutory changes.
Case for: Supporters argue this retroactive application provides certainty and relief to a large number of existing conservation easements that might have been challenged by the IRS on this specific technicality, validating past conservation efforts and reducing uncertainty.
Case against: Critics might argue that retroactive application could be seen as changing the rules after the fact, potentially undermining the IRS's previous enforcement actions or interpretations for those years, and could be viewed as unfair to the government.
Estimated impact: Potentially affects thousands of conservation easements established over more than a decade, impacting their tax deductibility and legal standing by resolving a key technical dispute.
Defines 'covered transaction' as any syndicated conservation easement transaction, as described in Internal Revenue Service Notice 2017-10, with respect to which a deduction was claimed for a contribution made before December 30, 2022.
Section 2(i)(1)
Why it matters:Standard legislative practice for defining key terms to ensure precise application of the law.
Case for: Supporters argue this clear definition provides a precise scope for the settlement program, targeting the specific transactions that have been the subject of IRS scrutiny while avoiding an overly broad application, ensuring the program is focused.
Case against: Critics might argue that the cutoff date of December 30, 2022, is arbitrary or that the reliance on Notice 2017-10 might implicitly validate aspects of the IRS's original characterization of these transactions, which some find problematic.
Estimated impact: Determines the universe of cases eligible for the settlement program, potentially affecting thousands of taxpayers and billions of dollars in disputed deductions.
Mandates the Secretary of the Treasury to submit annual reports for five years to relevant Congressional committees on the implementation of the Act, including the number of applications, settlements, non-imposed amounts, refusals, and payments, along with recommendations. The National Taxpayer Advocate must review these reports and provide comments.
Section 5
Why it matters:Standard legislative practice for establishing oversight and accountability mechanisms for new programs or significant policy changes.
Case for: Supporters argue this ensures transparency and accountability for the new program, allowing Congress to monitor its effectiveness, assess its fiscal impact, and ensure taxpayer rights are protected throughout the resolution process.
Case against: No specific opposition is typically raised against reporting requirements, though some might view it as an administrative burden for the Treasury Department and the IRS.
Estimated impact: Provides ongoing oversight and data for future policy decisions regarding conservation easements and tax dispute resolution, influencing potential legislative or administrative adjustments.