United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 4, 2011 Decided June 21, 2011

No. 10-1063

COMMISSIONER OF INTERNAL REVENUE SERVICE,

APPELLANT

v.

DOROTHY JEAN SIMMONS,

APPELLEE

Appeal from the United States Tax Court

Patrick J. Urda, Attorney, U.S. Department of Justice, 

argued the cause for appellant. With him on the briefs was 

Kenneth L. Greene, Attorney.

Robert J. Onda argued the cause for appellee. With him 

on the brief was Timothy S. Rankin.

Matthew A. Eisenstein was on the brief for amici curiae

The National Trust For Historic Preservation, The L=Enfant 

Trust, and Foundation for the Preservation of Historic 

Georgetown in support of appellee. 

Before: GINSBURG and GARLAND, Circuit Judges, and 

SILBERMAN, Senior Circuit Judge.
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Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge: The Commissioner of Internal 

Revenue appeals a decision of the Tax Court holding taxpayer

Dorothy Jean Simmons was entitled to claim deductions in 

2003 and 2004 for donating to the L’Enfant Trust, Inc. 

conservation easements on the façades of two buildings 

located in an historic district. The Commissioner argues 

Simmons may not take these deductions because her

contribution was not “exclusively for conservation purposes,”

as required by 26 U.S.C. § 170(h)(1)(C), and because she

failed to obtain “qualified appraisals” meeting the standards 

of Treasury Regulation § 1.170A-13(c)(3)(ii). We hold the 

Tax Court did not clearly err in concluding the factual 

circumstances supporting Simmons’s deductions met the 

applicable statutory and regulatory requirements.

I. Background

During the years at issue, Simmons owned two properties

in the Logan Circle neighborhood of Washington, D.C. —

one on the Circle and one nearby on Vermont Avenue. The

two properties were and are subject to the District of 

Columbia’s Historic Landmark and Historic District

Protection Act of 1978, D.C. Code § 6-1101 et seq. The D.C.

Historic Preservation Office may fine any person who violates 

the District’s preservation laws and can compel that person to

restore a structure that he impermissibly altered. Id. § 6-1110.

A. The Conservation Easement Deeds

The L’Enfant Trust, Inc. is a tax-exempt organization 

under 26 U.S.C. § 501(c)(3), dedicated to the preservation of 

historic properties. In 2003 Simmons executed a 

“Conservation Easement Deed of Gift” granting to L’Enfant 
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“an easement in gross, in perpetuity, in, on, and to the 

Property, the Building and the Façade” on Logan Circle. In

2004 she granted to L’Enfant another, essentially identical 

easement on the Vermont Avenue property.

Each deed prohibits Simmons from materially altering 

the façade of the property without the written consent of 

L’Enfant, and requires her to maintain the properties in good 

repair, periodically clean the façades, and ensure any change

to a façade will comply with “applicable federal, state and 

local governmental laws and regulations.” The deeds give

L’Enfant the right to inspect the façades and to seek equitable 

remedies for any violation of the easements. By their terms, 

the easements are binding upon Simmons and her 

“successors, heirs and assigns,” run “in perpetuity with the 

land,” and “survive any termination of Grantor’s or the

Grantee’s existence.”

The deeds allow L’Enfant “to give its consent (e.g., to 

changes in a Façade) or to abandon some or all of its rights”

thereunder. The deeds also acknowledge the properties were

already encumbered by deeds of trust securing loans to a 

mortgage company, but recite that the lenders have agreed to 

subordinate their rights in the property to the rights of 

L’Enfant “and join in the execution” of the easement deed for 

this limited purpose. Attached to each deed are “Lender 

Acknowledgements” signed by a representative of the lenders.

B. Simmons’s Claim of Charitable Deductions

Simmons filed tax returns for 2003 and 2004 claiming 

charitable deductions of, respectively, $162,500 and $93,000 

for having donated the conservation easements to L’Enfant.

A taxpayer generally may not take a charitable deduction for 

the gift of a partial interest in property. 26 U.S.C. § 
4

170(f)(3)(A). There is an exception, however, for a “qualified 

conservation contribution,” id. § 170(f)(3)(B)(iii), defined as 

the contribution “(A) of a qualified real property interest, (B) 

to a qualified organization, (C) exclusively for conservation 

purposes,” id. § 170(h)(1). The parties agree the easements 

are “qualified real property interest[s]” and L’Enfant is a 

“qualified organization.” See id. § 170(h)(2)(C), (3).

As required by the applicable Treasury regulations, see

Treas. Reg. § 1.170A-13(c)(2)–(3), Simmons obtained

appraisals performed by a licensed and certified appraiser,

estimating the fair market value of each easement, which

appraisals she submitted with her tax returns. The appraiser, 

James Donnelly, determined that prior to the easement the fair 

market value of the Logan Circle property was $1,250,000 

and that of the Vermont Avenue property was $845,000.

Donnelly estimated donation of the easement would diminish 

the value of the former by $162,500 (13 percent), and that of

the latter by $93,000 (11 percent).

Before the Tax Court, the Commissioner argued 

Simmons could not claim a charitable deduction because (1)

the easements were not granted “exclusively for conservation 

purposes,” (2) Simmons had failed to submit “qualified 

appraisals” proving the fair market value of the easements,

and (3) as shown by an appraisal done by an employee of the 

Internal Revenue Service, the easements were of no value.

The Tax Court disagreed in all respects but held the 

easements were worth only $56,250 and $42,250 respectively.

Simmons v. Comm’r, 98 T.C.M. (CCH) 211, 212 (2009).

II. Analysis

On appeal the Commissioner argues the Tax Court erred

in holding (1) the easements donated by Simmons were 
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“exclusively for conservation purposes,” § 170(h)(1)(C), and 

(2) Simmons had obtained “qualified appraisals” as required 

by Treasury Regulation § 1.170A-13(c)(3)(ii).* Because his 

arguments raise mixed questions of fact and law, our review 

is only for clear error. See Jombo v. Comm’r, 398 F.3d 661, 

663 (D.C. Cir. 2005).

A. Exclusively for Conservation Purposes

To reiterate, a taxpayer may take a deduction for a 

“conservation contribution” only if it constitutes a qualified 

interest in real property given exclusively for a “conservation 

purpose[].” For a contribution to be deemed exclusively for a 

conservation purpose, that purpose must be “protected in 

perpetuity.” 26 U.S.C. § 170(h)(5)(A). A regulation

promulgated by the Department of the Treasury states further

that “any interest in the property retained by the donor ... must 

be subject to legally enforceable restrictions ... that will 

prevent uses of the retained interest inconsistent with the 

conservation purposes of the donation.” Treas. Reg. § 

1.170A-14(g)(1).

The Commissioner argues Simmons is not entitled to 

deductions for charitable contributions because the easements

she granted L’Enfant satisfy neither the statute nor the 

regulation quoted above. More specifically, the 

Commissioner points to the clause in the deeds stating 

“nothing herein contained shall be construed to limit the 

Grantee’s right to give its consent (e.g., to changes in a 

Façade) or to abandon some or all of its rights hereunder.”

* The issue whether the Tax Court improperly valued the easements 

is not before us because, as the Commissioner clarified during oral 

argument, he did not raise this point as an independent basis for 

objecting to the judgment of the Tax Court.
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This clause, he maintains, is inconsistent with conservation in 

perpetuity because it leaves L’Enfant free to consent to an 

ahistorical change in the façade and to abandon altogether its 

right to enforce the restrictions set out in the deeds. The 

Commissioner also asserts the deeds will not prevent uses of 

the properties “inconsistent with” their conservation because 

neither easement includes a clause providing for the 

perpetuation of the easements in the event L’Enfant ceases to 

exist or simply abandons its right to enforce the easements.

Simmons objects that each deed states explicitly the 

parties’ intent to preserve the subject property and that, in any 

event, both she and L’Enfant are limited in what they can 

change by the District’s historic preservation laws. She also

points out that L’Enfant’s interest in preserving its tax-exempt 

status will prevent it from approving changes inconsistent 

with the conservation purposes of — let alone abandoning —

the easements. Finally, Simmons maintains if L’Enfant is 

dissolved, then the easements will be transferred to another 

organization that engages in similar activities, citing the 

testimony of the State Historic Preservation Officer.

We conclude the easements meet the requirement of 

perpetuity in § 170(h)(5)(A). The deeds impose an 

affirmative obligation upon Simmons “in perpetuity” to 

maintain the properties in a manner consistent with their

historic character and grant L’Enfant the authority to inspect 

the properties and to enforce the easements. By their terms, 

the deeds will “survive any termination of Grantor’s or the 

Grantee’s existence.” Although the deeds do not spell out 

precisely what would happen upon the dissolution of

L’Enfant, D.C. law provides the easements would be 

transferred to another organization that engages in “activities 

substantially similar to those of” L’Enfant. D.C. Code §§ 29-

301.48, 29-301.56. More specifically, the State Historic 
7

Preservation Officer testified the easement initially reverts to 

the District of Columbia, which then seeks to assign it to a 

conservation organization. Accordingly, the deeds do all the 

Commissioner can reasonably demand to “prevent” uses of 

the properties inconsistent with conservation purposes, as 

required by Treasury Regulation § 1.170A-14(g)(1).

The clauses permitting consent and abandonment, upon 

which the Commissioner so heavily relies, have no discrete

effect upon the perpetuity of the easements: Any donee might

fail to enforce a conservation easement, with or without a 

clause stating it may consent to a change or abandon its rights,

and a tax-exempt organization would do so at its peril. As the 

amici curiae — the National Trust for Historic Preservation, 

L’Enfant, and the Foundation for the Preservation of Historic 

Georgetown — further explain, this type of clause is needed

to allow a charitable organization that holds a conservation 

easement to accommodate such change as may become

necessary “to make a building livable or usable for future 

generations” while still ensuring the change is consistent with 

the conservation purpose of the easement.

Moreover, the Commissioner has not shown the 

possibility L’Enfant will actually abandon its rights is more 

than negligible. L’Enfant has been holding and monitoring 

easements in the District of Columbia since 1978, yet the 

Commissioner points to not a single instance of its having 

abandoned its right to enforce. Simmons’s deeds in particular

make express L’Enfant’s intention to ensure her properties 

“remain essentially unchanged.” Treasury Regulation §

1.170A-14(c)(1) also provides “an eligible donee” — as

L’Enfant undisputedly is — must have a “commitment to 

protect the conservation purposes of the donation” and “the 

resources to enforce the restrictions.” Simmons’s entitlement

to a deduction for a “qualified conservation contribution” 
8

under 26 U.S.C. § 170(f)(3)(B)(iii), therefore, is supported by

the limitation in Treasury Regulation § 1.170A-14(g)(3):

A deduction shall not be disallowed under section 

170(f)(3)(B)(iii) and this section merely because the 

interest which passes to, or is vested in, the donee 

organization may be defeated by the performance of 

some act or the happening of some event, if on the 

date of the gift it appears that the possibility that such 

act or event will occur is so remote as to be negligible.

Simmons’s deductions cannot be disallowed based upon the 

remote possibility L’Enfant will abandon the easements. See 

Stotler v. Comm’r, 53 T.C.M. (CCH) 973, 980–81 (1987) 

(concluding easement was granted in perpetuity even though 

grantee could abandon it because possibility future events

would undermine perpetuity was “so remote as to be 

negligible”).

We also note any change in the façade to which L’Enfant 

might consent would have to comply with all applicable laws 

and regulations, including the District’s historic preservation 

laws.In short, because the donated easements will prevent 

in perpetuity any changes to the properties inconsistent with 

conservation purposes, we hold Simmons has made a 

contribution “exclusively for conservation purposes,” in 

accordance with 26 U.S.C. § 170(h)(1)(C).

The Commissioner makes the rather niggling argument that, 

because of certain administrative shortcomings, compliance with 

the District’s preservation scheme would not perpetuate the 

conservation purposes of the deeds. Appearing as it does for the 

first time in the reply brief, the argument is forfeit and we do not 

address it. See Sitka Sound Seafoods, Inc. v. NLRB, 206 F.3d 1175, 

1181 (D.C. Cir. 2000).
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B. Qualified Appraisals

Section 155(a) of the Deficit Reduction Act of 1984, Pub. 

L. No. 98-369, 98 Stat. 494, 691, directs the Secretary of the 

Treasury to prescribe regulations requiring an individual 

claiming a charitable deduction pursuant to § 170 for property 

valued at more than $5,000 to obtain “a qualified appraisal for

the property contributed.” The regulations contain

“substantiation requirements,” viz., that the appraisal include,

as relevant here:

(J) The method of valuation used to determine the 

fair market value, such as the income approach, 

the market-data approach, and the replacementcost-less-depreciation approach; and

(K) The specific basis for the valuation, such as 

specific comparable sales transactions or statistical 

sampling ....

Treas. Reg. § 1.170A-13(c)(2)–(3).

The Commissioner argues the Tax Court erred in holding

Simmons’s appraisals were “qualified.” First, he contends 

Donnelly failed to explain the “method of valuation” he used

and to include a substantive basis for the valuation, as 

required by paragraphs (J) and (K), set out above. In doing 

the appraisals, Donnelly had relied upon an article prepared 

by Mark Primoli, an IRS employee, which stated, “Internal 

Revenue Service Engineers have concluded that the proper 

valuation of a façade easement should range from 

approximately 10% to 15% of the value of the property.”

Internal Revenue Service, Façade Easement Contributions

(2000). The Commissioner suggests Donnelly arbitrarily

picked a percentage between 10 and 15 rather than stating any 

identifiable method to determine the “after-easement” value.
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Simmons argues that because there was no market price

for conservation easements, Donnelly properly used the 

“before and after approach,” Hilborn v. Comm’r, 85 T.C. 677, 

688–89 (1985): He calculated the “difference between the 

fair market value of the property” prior to donation and “the 

fair market value of the encumbered property after the 

granting of the restriction,” as permitted by § 1.170A14(h)(3). To estimate the fair market value of each property

once subject to the easement, Donnelly examined sales of 

similarly encumbered properties and took into account factors 

a buyer would consider in valuing such a property. The 

Commissioner, however, complains Donnelly did not identify 

the properties examined or the parties with whom he spoke

and therefore did not provide adequate detail; instead, he said 

he had considered “subjective and conjectural factors” that 

would lower the value of the properties after being

encumbered by easements.

We hold the Tax Court did not clearly err in concluding 

the appraisals sufficiently identified the method and basis for 

the valuations. To determine the fair market value of the 

property before being encumbered, Donnelly consulted sales 

of similar properties and identified some of these sales in the 

appraisals. In ascertaining the fair market value after

encumbrance, Donnelly explained he spoke with and 

considered “the mindset of competent buyers and sellers” and 

took account of the “considerations they have actually had, or 

are likely to have, in the buying or selling of a property 

encumbered by a façade easement.” For example, each 

appraisal noted the property would lose some value because 

the easement imposed more onerous requirements than does

D.C. law. It also listed several factors that would lower the 

value of the encumbered property, such as potential legal 

exposure if the donor were to breach the easement and 
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L’Enfant’s right of prior approval for any change to the 

façade.

After examining sales of easement-encumbered 

properties and speaking with interested parties, Donnelly 

concluded the donation of each easement would diminish the 

value of the property by from 10 to 15 percent, as

contemplated by Primoli’s article. Specifically, he 

determined the Logan Circle and the Vermont Avenue 

properties would lose, respectively, 13 and 11 percent of their 

value. Although the appraisals might have elaborated further 

upon the specific bases for reaching each valuation, and thus 

avoided litigation of this issue, it was not clear error for the 

Tax Court to conclude Simmons satisfied the substantiation 

requirements concerning valuation.*

In a footnote, the Commissioner “suggests” the appraisals 

“failed to satisfy other requirements of [Treasury Regulation]

* The Commissioner also contends the requirements of § 1.170A13(c)(3) are mandatory rather than directory and therefore cannot 

be satisfied by merely substantial compliance. Cf. Bond v. Comm’r,

100 T.C. 32, 41 (1993) (if Treasury regulations “are procedural or 

directory in that they are not of the essence of the thing to be done 

..., they may be fulfilled by substantial, if not strict compliance”) 

(quoting Taylor v. Comm’r, 67 T.C. 1071, 1077–78 (1977)). For 

her part, Simmons argues the requirements in § 1.170A-13(c)(3) are 

directory because they do not go to “the essence” of whether a 

charitable contribution has been made under § 170. See Bond, 100 

T.C. at 40–41 (reporting requirements of § 1.170A-13(c)(2)(i)(A) 

and (3) are “directory and not mandatory”). We need not, however, 

resolve the issue whether a taxpayer can fulfill the requirements of 

§ 1.170A-13(c)(3) through substantial compliance because we 

conclude above that the Tax Court did not clearly err in finding 

Simmons fully “complied with the substantiation requirements” by 

including “all of the required information.” 98 T.C.M. (CCH) at 

216.
12

§ 1.170A-13(c)(3)(ii)” but acknowledges the “omissions 

might seem venal [sic] sins.” It is not our practice, however, 

to indulge “cursory arguments made only in a footnote.”

Spirit of the Sage Council v. Norton, 411 F.3d 225, 229 n.*

(D.C. Cir. 2005) (internal quotation marks omitted).

Accordingly, we hold the Tax Court did not err in holding 

Simmons provided the Commissioner with “qualified 

appraisals.”

III. Conclusion

For the foregoing reasons, the judgment of the Tax Court

that Simmons was entitled to claim the deductions at issue is 

Affirmed.