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Sirote & Permutt's Ronald Levitt and David Wooldridge Quoted in Business Alabama Article on Kiva Dunes Case

August 25, 2014

Sirote & Permutt’s conservation easement leaders, Ronald Levitt and David Wooldridge, recently contributed to an article in Business Alabama about the importance of conservation easements. The Aug. 4 article, titled “Your Company on the Line,” analyzes various bet-the-company cases, the strategies different companies take and the results of each case.

One section of the article focuses on the tax case between Kiva Dunes golf course, located on Alabama’s Fort Morgan Peninsula, and the Internal Revenue Service (IRS). Larry Drummond, owner of Kiva Dunes, and the other members of the golf course set aside portions of the course through a conservation easement, a process guided by his attorneys, including Levitt. The IRS ultimately disallowed the substantial charitable deduction that resulted from the grant of the conservation easement, but Drummond and the other owners chose to fight the IRS and to take their case to the U. S. Tax Court.

Levitt worked on the implementation of the conservation easement while working at a different Birmingham-based law firm and joined Sirote & Permutt in 2005, almost exactly as the IRS audit in Kiva Dunes was heating up. Sirote attorneys Levitt and Wooldridge were then hired to defend the conservation easement deduction. After 3,000 hours and three years, Sirote successfully showed the tax court that conservation easements were legal. “[Drummond] got to keep his golf course, which he loved, and he wanted to preserve the land, and he was able to do both,” Levitt said.

Levitt and Wooldridge, both whom worked on this Tax Court case, shared their insights and experiences in the article. “You had Congress over here saying they like conservation easements, they think they are a good thing, and they still do. You had the IRS over here saying they don’t like these (deductions for easements) and we especially don’t think you can do it on a golf course. It just didn’t make sense to them, and they were going to use this case to set a precedent,” Wooldridge said.

Read the full article from Business Alabama here. Also, Levitt and Wooldridge comment regularly on tax issues in the Sirote Conservation Easement Blog, as well as the Sirote Tax Controversy Blog.

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