Court affirms penalty on deduction for worthless easement

The First Circuit Court of Appeals, dealing for the second time with the IRS’s denial of a charitable contribution deduction for an historic façade easement, has affirmed a Tax Court decision to impose a 40% penalty on taxpayers who improperly claimed a $220,800 deduction.  (See Nonprofit Issues^®, Tax Matters, 5/1/14.)  The Court said there was no clear error in the Tax Court’s imposition of the penalty.