t c summary opinion united_states tax_court margaret payne petitioner v commissioner of internal revenue respondent docket no 3517-12s filed date margaret payne pro_se frederick c mutter for respondent summary opinion panuthos chief special_trial_judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code code in effect when the petition was filed pursuant to sec_7463 the decision to be entered is not reviewable by any other court and this opinion shall not be treated as precedent for any other case unless otherwise indicated subsequent section references are to the internal_revenue_code in effect for the years in issue and all rule references are to the tax_court rules_of_practice and procedure in a notice_of_deficiency dated date respondent determined deficiencies in petitioner’s federal_income_tax of dollar_figure and dollar_figure for tax years and respectively respondent also determined sec_6662 accuracy-related_penalties of dollar_figure and dollar_figure for tax years and respectively after concessions the issues for decision are whether petitioner is entitled to deductions for charitable_contributions for the years in issue and whether she is liable for accuracy-related_penalties under sec_6662 background some of the facts have been stipulated and are so found the stipulation of facts and the attached exhibits are incorporated herein by this reference petitioner resided in new york when her petition was filed petitioner agrees that she failed to report gambling winnings of dollar_figure for in the notice_of_deficiency respondent included said amount as additional income and also allowed petitioner an additional gambling loss in the identical amount at the time of trial petitioner was employed by the internal_revenue_service irs as a revenue_agent in the manhattan office at that time she had worked as a revenue_agent for years and had been employed by the irs for years petitioner graduated from college with two majors and a minor in accounting finance and economics and has completed some graduate work in forensic accounting she has also passed some parts of the c p a exam and at the time of trial was working at passing the remaining parts during the years in issue petitioner frequented casinos in atlantic city new jersey petitioner visited casinos approximately three times per month and generally played the slots and sometimes played card games as well petitioner sometimes used cash to gamble and other times she used a line of credit provided by the casino petitioner asserts that as she won money at the casinos during the years in issue she made cash contributions from her winnings to the living stone baptist church lsbc in brooklyn new york lemuel m mobley was the pastor of the church at the time of trial and had been the pastor of lsbc for years during the years in issue there were approximately to members of the church pastor mobley knew all the members by name and face guests frequently attended lsbc and each sunday the number of guests varied from none to a few each sunday after services pastor mobley would personally greet all persons in attendance there are baskets in lsbc where congregants can make donations the donations are generally made in cash sometimes placed in the basket without an envelope and other times placed in envelopes with a congregant’s name written on the envelope after the sunday service designated church members and or trustees count and record the contributions a record is kept of the contributions made each sunday and a report is made each week to the pastor as to the amounts of the contributions including names of the contributors to the extent the contributions were identified at the end of each year lsbc provided a letter to each congregant upon request reflecting the congregant’s annual contributions lsbc required the congregant to personally pick up his or her letter and to sign for it to acknowledge that he or she had received a letter reflecting annual contributions juanita stevenson has worked as a secretary for the irs since ms stevenson works at the same manhattan office building as petitioner and she and petitioner met when they were both working in taxpayer services at the irs ms stevenson and petitioner have been friends and sometimes coworkers although they worked in different sections at the irs at the time of trial ms stevenson has been a member of lsbc for years she regularly attends sunday services and has volunteered in various ministries of lsbc petitioner timely filed form sec_1040 u s individual_income_tax_return for and the returns were filed as married_filing_separately on her return petitioner reported gambling winnings and gambling_losses of dollar_figure as indicated the parties agree that the gambling winnings and losses for were dollar_figure petitioner also claimed a deduction for charitable_contributions of dollar_figure for of this amount respondent disallowed a purported cash contribution to lsbc of dollar_figure on her return petitioner reported gambling winnings and losses of dollar_figure no adjustments were made to the gambling winnings and losses for petitioner also claimed a deduction for charitable_contributions of dollar_figure for of this amount respondent disallowed a deduction for a purported cash contribution to lsbc of dollar_figure during the examination of petitioner’s and returns respondent’s agent questioned petitioner about the claimed charitable_contribution deductions in response to the examination petitioner provided the examining agent with copies of purported letters from lsbc the letters purported to be on the letterhead of lsbc are dated date and date and state that petitioner made contributions to lsbc in and of dollar_figure and dollar_figure respectively the letters are purportedly signed by pastor mobley after receipt of the aforementioned letters the examining agent contacted lsbc to ascertain whether petitioner was a member and whether in fact she had made contributions to lsbc pastor mobley spoke with the examining agent ms cohen and advised that petitioner was not a member of lsbc that he did not know petitioner and that petitioner had not made any contributions to lsbc he advised that the letters reflecting contributions were not signed by him and that the letterheads were a cut and paste job following his meeting with the revenue_agent pastor mobley advised the congregation at a sunday service that an irs agent was conducting an investigation concerning alleged contributions to lsbc and asked the congregation whether anyone knew petitioner after the service juanita stevenson came forward and advised pastor mobley that she knew petitioner ms stevenson advised that petitioner sometimes went by the nickname schouchi at some later point petitioner contacted pastor mobley to discuss this matter there are varying accounts from the parties as to what was discussed and what pastor mobley also indicated that his name was misspelled on both letters happened next pastor mobley wrote a letter dated date where he stated as follows i am writing this letter to recant statements that i made in a previous letter dated april 7th that was written as it relates to margaret payne i stated that i didn’t know who she was because she was using another name the amounts of money she stated that she gave were true she pieced together a financial statement and stated to me that she had one of her children to sign my name after sunday morning worship on sunday april 10th nita stevenson came to my office and admitted that she was margaret payne she stated that she was sorry for what she had done she asked for forgiveness and i forgave her for what she had done to me as well as to the church i did not give her or anyone else permission to sign my name on any document mrs cohen from the irs office called for a few days at least three to four times a day she stated that whomever she talked to told her that the living stone church was a small church and that nobody in this church could give that amount of money her attitude was not appropriate and especially when i found out whom margaret payne was she talked to me as if i didn’t know what i was doing i didn’t like the way she talked to me at all pastor mobley signed two letters dated date indicating that petitioner had made contributions to lsbc in and of dollar_figure and dollar_figure respectively pastor mobley provided three contradictory explanations as to the events at one point he stated that the letters actually represent contributions from ms stevenson at another point he indicated that he may have confused petitioner with ms stevenson and at another point he suggested that petitioner had promised to make a contribution at some later point in return for these letters discussion the commissioner’s determination set forth in a notice_of_deficiency is presumed correct and a taxpayer generally bears the burden of proving otherwise rule a 290_us_111 deductions are a matter of legislative grace and the taxpayer bears the burden of proving entitlement to any deduction claimed rule a 292_us_435 pursuant to sec_7491 the burden_of_proof may shift to the commissioner if the taxpayer produces credible_evidence with respect to any relevant factual issue and meets other requirements petitioner does not contend that sec_7491 shifts the burden_of_proof to respondent nor does the record establish that petitioner satisfies the sec_7491 requirements i charitable_contributions sec_170 allows deductions for charitable_contributions made during a taxable_year provided the taxpayer verifies the contributions taxpayers are required to substantiate donations made by cash or check via canceled checks receipts from the donee showing the donee’s name and the date and amount of the donation or other reliable written records sec_1_170a-13 income_tax regs we must decide whether petitioner has satisfied her burden of establishing that she made contributions of dollar_figure and dollar_figure in and respectively the record in this matter is full of inconsistencies contradicting testimony fabricated documents and simple untruths sorting through the testimony of three witnesses each of whom not only contradicted the testimony of the others but also contradicted his or her own testimony and documents leads the court to conclude that petitioner’s only motivation in this case was a misguided and inept attempt to support claimed charitable_contribution deductions through a fictional account of the past petitioner was not a member of lsbc during the years in issue pastor mobley was clear that he knew all his congregants by name and face and that he did not know petitioner pastor mobley apparently first met petitioner in after the examination of petitioner’s tax returns commenced it seems improbable that petitioner ever attended lsbc and even less probable that she made donations in any amount it appears highly probable that petitioner in concert with her longtime friend and fellow irs employee cut and pasted stationery from lsbc and provided the same to the irs agent examining the returns in an attempt to support the claimed deductions that attempt failed when the irs agent attempted to verify the reported contributions with pastor mobley the pastor made clear that he did not authorize the receipts to be prepared or issued on lsbc stationery nor did he sign any such receipts even after these false documents were exposed by the examining revenue_agent petitioner continued to pursue her efforts to obtain documents in support of the reported contributions pastor mobley subsequently wrote letters appearing to support the claimed charitable_contributions to lsbc pastor mobley presented various contradicting versions of the past while the prevailing stories vary one matter of which we are absolutely certain is that petitioner has not presented any credible_evidence that she made the contributions to lsbc reported on her and tax returns petitioner has not established that she is entitled to the claimed deductions and respondent’s determinations are accordingly sustained ii accuracy-related_penalties sec_6662 and b and imposes a penalty of of the portion of an underpayment_of_tax attributable to the taxpayer’s negligence disregard of rules or regulations or substantial_understatement_of_income_tax negligence includes any failure to make a reasonable attempt to comply with the code including any failure to keep adequate books_and_records or to substantiate items properly see sec_6662 sec_1_6662-3 income_tax regs disregard includes any careless reckless or intentional disregard sec_6662 negligence has also been defined as a failure to exercise due care or the failure to do what a reasonable and ordinarily prudent person would do under the circumstances see 92_tc_1 aff’d 925_f2d_348 9th cir 85_tc_934 with respect to a taxpayer’s liability for any penalty sec_7491 places on the commissioner the burden of production thereby requiring the commissioner to come forward with sufficient evidence indicating that it is appropriate to impose the penalty 116_tc_438 once the commissioner meets his burden of production the taxpayer must come forward with persuasive evidence that the commissioner’s determination is incorrect see id pincite see also rule a welch v helvering u s pincite respondent determined the accuracy-related_penalty for each year was due to negligence or disregard of rules or regulations petitioner claimed deductions on her and returns for purported contributions that she is unable to substantiate respondent’s burden of production under sec_7491 has been satisfied the sec_6662 accuracy-related_penalty does not apply with respect to any portion of an underpayment if the taxpayer proves that there was reasonable_cause for such portion and that she acted in good_faith with respect thereto sec_6664 the determination of whether a taxpayer acted with reasonable_cause and in good_faith depends on the pertinent facts and circumstances including the taxpayer’s efforts to assess the proper tax_liability the knowledge and the experience of the taxpayer and the reliance on the advice of a professional such as an accountant sec_1_6664-4 income_tax regs petitioner offered no argument or other evidence to show that there was reasonable_cause for the deductions claimed and that she acted in good_faith with respect to the underpayments we are satisfied that petitioner who has been employed as an irs revenue_agent for a number of years did not make a good- faith effort to properly determine her and federal_income_tax liabilities and that the underpayments result from her very deliberate and knowing attempt to reduce her tax_liabilities accordingly we hold that petitioner is liable for the sec_6662 accuracy-related_penalty for and to reflect the foregoing decision will be entered for respondent


t c memo united_states tax_court john a atkinson and judy b atkinson et al petitioners v commissioner of internal revenue respondent docket nos filed date david m wooldridge ronald a levitt gregory p rhodes and michelle abroms levin for petitioners christopher d bradley and john t arthur for respondent cases of the following petitioners are consolidated herewith kenan c wright and molly f wright docket no warren w wills jr and margaret a wright docket no h edward wright iii and phyllis c wright docket no dwight c hopkins and martha w hopkins docket no and the reserve club at st james plantation llc reserve development co tax_matters_partner docket no memorandum findings_of_fact and opinion wells judge petitioners contest the following deficiencies and penalties petitioner the reserve club john judy b atkinson john judy b atkinson h edward phyllis c wright h edward phyllis c wright h edward phyllis c wright warren w wills jr m wright warren w wills jr m wright dwight c martha w hopkins dwight c martha w hopkins dwight c martha w hopkins kenan c molly f wright kenan c molly f wright kenan c molly f wright period deficiency dollar_figure big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number big_number penalty dollar_figure or big_number big_number big_number big_number big_number -- big_number big_number big_number big_number -- big_number big_number -- the issues in the instant cases concern petitioners’ entitlement to charitable_contribution deductions and expense deductions for the following two conservation easements on an operating golf course in north carolina a deduction of dollar_figure plus expenses for tax_year for a conservation_easement conveyed by the members club at st james plantation llc members club and a deduction of dollar_figure plus expenses for tax_year for a conservation_easement conveyed by the reserve club at st james plantation llc reserve club the issues we must decide are whether the conservation easements comply with the conservation_purpose requirement of sec_170 whether the easements were properly valued for purposes of the deduction under sec_170 and if petitioners are not entitled to deductions under sec_170 whether they are liable for accuracy-related_penalties we note here that we were presented with similar issues in kiva dunes conservation llc v commissioner tcmemo_2009_145 as in the instant cases the taxpayer in kiva dunes conveyed a conservation_easement over an operating golf course and claimed a deduction under sec_170 however in kiva dunes we were not required to decide the issue of compliance with the conservation_purpose requirement of sec_170 because the commissioner had conceded that issue on brief after trial and we therefore decided only the remaining valuation issue in the instant cases we address the conservation_purpose issue but because of our holding below we do not reach the valuation issues unless otherwise indicated section references are to the internal_revenue_code_of_1986 as amended and as in effect for the years in issue and rule references are to the tax_court rule_of practice and procedure findings_of_fact some of the facts and certain exhibits have been stipulated by the parties the facts so stipulated are incorporated in this opinion and are found accordingly petitioner reserve development co a limited_liability_company that had an office in southport north carolina at the time its petition was filed is the tax_matters_partner for the reserve club the individual petitioners are the members of the members club and their spouses members club petitioners petitioners warren w wills jr and margaret a wright resided in georgia at the time they filed the petition in their case docket no all remaining individual petitioners resided in north carolina at the time their petitions were filed including john a and judy b atkinson docket no dwight c and martha w hopkins docket no kenan c and molly f wright docket no and h edward wright iii and phyllis c wright docket no although they are taxed as partners for federal tax purposes we refer to the individual petitioners as members and not partners because the members club is not a partnership but rather a limited_liability_company formed under north carolina law we sometimes herein use the term petitioners to refer to the members club petitioners as well as the combination of the members club petitioners and the reserve club tax_matters_partner i background the contributed easement areas relating to the disputed charitable_contribution deductions are within st james plantation a community development established in covering of the town of st james west of southport north carolina st james plantation several entities such as the members club and the reserve club own portions of st james plantation over a period of several years st james plantation worked closely with the north american land trust nalt to create a system of easements over the development with the goal of protecting important habitat and a significant geologic area st james plantation is a development comprising residential areas recreational facilities such as golf courses and undeveloped land st james plantation has gated entrances with a staffed guardhouse on each of the three roads into and out of the development drivers are obliged to stop at a gated entrance and state the purpose of their visit to obtain entry all of the residences businesses and amenities in st james plantation including all property covered by the easements in issue in the instant cases can be accessed only via road by passing through a gated entrance ii easement a introduction in st james plantation added nine holes known as the cate to the members club golf course on date the members club conveyed a conservation_easement to nalt over acres covering the area in and around the cate which was operating as a golf course at the time easement the easement property consists of six noncontiguous tracts ranging in size from acres to acres which come together in a vaguely figure-eight shape the easement property is bordered by residential lots except for the center of the figure-eight where the property directly abuts swamps and wetlands the easement property consists of fairways greens teeing grounds ranges rough ponds and wetland areas in the following proportions area tees bunkers fairways greens rough ponds other wetlands total acre sec_15 dollar_figure percentage the foregoing percentages do not include the portion of the easement property which is covered by a concrete cart path winding through all six tracts of the easement including areas labeled wetlands and other eight months after securing the easement nalt obtained the middle swamp easement a conservation_easement over approximately acres of swamps and wetlands abutting the center of the figure-eight-shaped easement nalt considers the middle swamp a wetland conservation area photos of the middle swamp show tall trees undisturbed yet open understory and a walkway a u s fish and wildlife service map of the area shows wetlands classified in the middle swamp area the easement had been granted in contemplation of the middle swamp easement b terms of the easement the easement deed identifies two conservation purposes preservation of the conservation area as a relatively natural habitat of fish wildlife or plants or similar ecosystem and preservation of the conservation area as open space which if preserved will advance a clearly delineated federal state or local governmental conservation policy and will yield a significant public benefit we discuss the contributory benefits the easement may provide to the middle swamp without regard to the fact that there was no guaranty that the middle swamp easement would be issued at the time the easement was granted pursuant to the terms of the easement the owners of the easement area retain the right to operate a golf course make alterations and engage in certain construction activities the golf course in the easement area may be altered in such manner as owner determines to be appropriate as long as the best environmental practices then prevailing in the golf industry are used and applied specifically the easement allows for digging filling excavating dredging or removing topsoil as necessary for maintaining golf course sand traps or for the cultivation of sod for use on the golf course cart paths may be relocated as long as the relocation does not substantially increase the surface area taken up by cart paths the deed permits the construction of rain shelters rest stations food concession stands and other structures on the easement property as long as they do not exceed a total of big_number square feet the owner may substantially increase the amount of surface area covered by the golf course if it secures prior consent from the easement holder and there is no material adverse effect on the conservation purposes the owner may also cut and remove trees that are on the golf course or within feet of the golf course if the owner determines their removal is appropriate for the proper maintenance of the golf course additionally the owner may cut trees to build a restroom rain shelter rest station or food concession stand to maintain the cate st james plantation applies fungicides herbicides insecticides and adjuvants on the tees fairways and rough the easement deed does not prohibit the use of pesticides and other chemicals on the easement property while the easement deed prohibits the manufacture of chemicals of any kind it allows for the storage and use of chemicals in connection with activities not prohibited by the easement deed the easement deed provides the owner with the right to operate and manage a golf course on the property and to maintain turf grass and other vegetation of the golf course in such manner as owner determines to be appropriate moreover nalt’s annual monitoring reports state that the easement areas including the easement area appeared to be in very good condition and in accord with the terms of the various easement documents accordingly the application of these chemicals is within the terms of the easement deed c natural qualities the easement is in brunswick county which lies within the cape fear arch the region has been identified as a biodiversity hotspot by the nature conservancy a natural heritage program according to the cape fear arch conservation collaborative conservation plan the cape fear arch has the highest biological diversity of any area on the atlantic coast north of florida it is close to but not in the boiling springs lakes complex on date christopher r wilson a conservation biologist with nalt inspected the easement area and produced a baseline report the report generally describes the importance of preserving areas and forests described as old-growth which include woody debris and undisturbed soils the report also recognizes the ecological importance of active forest management activities such as prescribed burns and encourages landowners to recognize the extreme ecological importance of woody debris and undisturbed soils mr wilson observed several species on the easement property such as fish crows great blue herons and american kestrel the golf superintendent who accompanied mr wilson during the inspection advised him that an american alligator a state threatened species was occasionally observed on the course’s ponds threatened is defined as a taxon likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range the report states the property provides wildlife travel corridors for the red-cockaded woodpecker a species federally designated as endangered which is defined as a taxon in danger of extinction through all or part of its range the report however does not reference any specific sightings or evidence of migration of the red-cockaded woodpecker on the easement property the report also includes photos which mostly depict open areas of mowed grass ponds surrounded by mowed grass and a line of trees with dense foliage surrounding houses one photo shows a pond surrounded by many bushes and trees no houses are visible in that photo the pond with the densest foliage surrounding it where mr wilson heard a large southern leopard frog chorus is labeled a temporary pool habitat at trial nalt representatives testified that they had seen plants of particular concern such as venus flytraps on the easement area and located them with gps coordinates the baseline report includes an nc natural heritage program map identifying where venus flytrap plants are located but none of the locations are on the easement area the venus flytrap is designated a federal species of concern meaning it is more stable than endangered the highest designation or threatened the second highest designation in global ranks the venus flytrap is a g3 meaning it is r are or uncommon localized within range or narrowly endemic to special habitats generally occurrences and falls between g2 i mperiled globally because of rarity and g4 a pparently secure nalt also issued monitoring reports after inspections conducted in and the reports consist mostly of photos the photos of the cate area show a stone weir at the bottom of a small pond surrounded by houses and a few bushes and trees plume grass in a small landscaped area adjacent to the golf fairway with trees and houses in the background an emergency bridge constructed after the easement was granted and many images of the fairways which variably include a cart path a line of trees dotted with houses and ponds surrounded mostly by well-manicured grass the text of the monitoring reports describes six easement properties in st james plantation although the reports note sightings of animals they do not always specify on which of the easement properties they were seen as mentioned above the reports all state that st james plantation complied with the terms of the easement deeds nalt did not collect or analyze soil or water samples for any of its reports d notice_of_deficiency on or about date the members club filed its form_1065 u s return of partnership income for the tax_year ended on its form the members club deducted a charitable_contribution of dollar_figure as the claimed value of the easement and attached an appraisal by f bruce sauter attached to the members club’s form_1065 are schedules k-1 partner’s share of current income deductions credits and other items showing the amount allocated to each of the members club petitioners those petitioners then reported the amounts on their individual form sec_1040 u s individual_income_tax_return on date respondent issued a notice_of_deficiency to each of the individual petitioners disallowing their portion of the charitable_contribution_deduction on date each of the members club petitioners timely filed a petition with the tax_court for redetermination of the deficiencies determined in the notices of deficiency on date the court granted respondent’s motion to consolidate for trial briefing and opinion iii easement a introduction on date the reserve club conveyed a conservation_easement on dollar_figure acres within st james plantation to nalt easement the easement encumbers most of the reserve club golf course which opened for play in date the easement area consists of noncontiguous tracts each approximately acres the easement area is bordered in part by residential lots as with the easement the easement property’s noncontiguous tracts cover a variety of land types area tees bunkers fairways greens rough ponds other wetlands total acre sec_15 dollar_figure percentage the easement area also includes a winding concrete cart path the area of which is not included in the property percentages concurrently with the easement nalt was granted a second easement over approximately dollar_figure acres by the reserve development co llc wetlands ii easement the wetlands ii easement area borders the eastern edge of tract of the easement area b terms of the easement the easement deed is almost identical to the easement deed the deed states the same two conservation purposes and provides for the same reserved rights the reserved rights include among others the right to operate and manage a golf course the right to alter or modify the golf course and cart path provided their aggregate surface area does not substantially increase without the prior consent of the easement holder the right to construct and maintain utility facilities within certain limitations the right to construct and maintain stands or blinds for hunting or wildlife observation and the right to cut remove or destroy trees within feet of the golf course some of such reserved rights do not apply to areas designated as wetlands st james plantation applies fungicides herbicides insecticides and adjuvants on the tees fairways and rough which the easement deed does not prohibit c natural qualities as with the easement the easement is in brunswick county and the cape fear arch additionally portions of the easement are within the boiling springs lake wetland complex a section of the cape fear arch delineated as nationally significant by the north carolina natural heritage program and the nature conservancy the easement is in an area that was once dominated by longleaf pine forests peter smith a conservation biologist for nalt inspected the easement area on date and date before producing a baseline report the baseline report covers the easement and the wetlands ii easement areas together as with the easement baseline report the easement baseline report describes the desired condition for the easement property forests as old-growth containing well-developed soils and an abundance of woody debris the report also addresses aquatic features management and discusses streams stream channels wetlands and bogs the report mentions ponds in that it says that the introduction of fish to the ponds is discouraged the report also identifies species seen on the easement area two of the species are recognized on the federal level as discussed above the venus flytrap which is a species of concern and the american alligator which is threatened three species the shortleaf yellow-eyed grass yellow pitcher plant and purple pitcher plant are recognized at the state level as either significantly rare - peripheral or exploited plants the report also identifies species to be potentially found in the easement including the red-cockaded woodpecker the report notes that the primary adjacent land use is residential golf course community development the photos in the report show images of both the easement area and the wetlands ii area the photos specifically marked as being from the reserve club golf course most of which is covered by the easement show a pond surrounded by mowed grass up to the edge and trees in the distance undeveloped wetlands a concrete bridge over mostly undeveloped wetlands with sparse trees in the distance a picture of the golf course shown ringed by a line of trees and a mowed open field transected by rougher shrubs and grasses and ringed by a concrete path and trees most of the tree coverage appears fairly dense from the ground to the tree tops nalt included the easement in the same monitoring reports as the easement only one monitoring report issued in notes that nalt observed good populations of wetland plants including the venus flytrap and pitcher plants captured in two closeup photos the eastern fox squirrel designated significantly rare by north carolina was also observed in the easement area in describing the habitat factors mr smith wrote that there were no noted denning sites ie sites where animals build their dens the photos in these reports echo the photos of the baseline report depicting manicured grass ponds trees cart paths and some wetlands one photo shows tall trees with an open understory d final_partnership_administrative_adjustment on date the reserve club filed its form_1065 for tax_year the reserve club deducted a charitable_contribution of dollar_figure as the claimed value of the conservation_easement and attached an appraisal by mr sauter on date respondent issued to the tax_matters_partner of the reserve club a notice of final_partnership_administrative_adjustment fpaa proposing to disallow the deduction for the conservation_easement on date the reserve club tax_matters_partner timely filed a petition with the tax_court for readjustment of the adjustments in the fpaa on date this court ordered the reserve club’s case to be consolidated with the members club cases i jurisdiction opinion because one of the petitions was filed in respect of an llc treated as a partnership subject_to tefra we begin our analysis with a discussion of the court’s jurisdiction over a tefra proceeding the court is a court of limited jurisdiction and we may exercise our jurisdiction only to the extent provided by congress see sec_7442 the court has authority in a tefra partnership-level proceeding to determine all partnership items for a partnership taxable_year to which the fpaa relates the proper allocation of partnership items among the partnership’s partners and the application of any penalty addition_to_tax or additional_amount that relates to an adjustment to a partnership_item sec_6226 partnership items include among other items nondeductible partnership expenses such as charitable_contributions sec_301_6231_a_3_-1 proced admin regs the court’s jurisdiction over a tefra partnership-level proceeding is invoked upon the commissioner’s issuance of a valid fpaa and the proper filing of a petition_for_readjustment of partnership items for the year or years to which the fpaa pertains see 123_tc_64 petitioner reserve development co timely filed a petition challenging the adjustments in the fpaa we therefore have jurisdiction to determine whether the charitable_contribution_deduction in issue was properly taken by the reserve club pursuant to sec_170 as well as the applicability of any related penalty or addition_to_tax sec_6226 ii legal standard taxpayers may deduct the value of charitable_contributions made during the tax_year pursuant to sec_170 generally taxpayers are not entitled to deduct gifts of property that consist of less than the taxpayers’ entire_interest in that property sec_170 however taxpayers are permitted to deduct the value of a contribution of a partial interest in property that constitutes a qualified_conservation_contribution as defined in sec_170 sec_170 for a contribution to constitute a qualified_conservation_contribution the contribution must be of a qualified_real_property_interest to a qualified_organization and exclusively for conservation purposes sec_170 in the instant cases the parties agree that the contributions petitioners made were of qualified_real_property interests and that those contributions were made to a qualified_organization accordingly the only issues remaining for us to decide are whether those contributions were made exclusively for conservation purposes and if so whether petitioners properly valued their contributions a contribution must satisfy one of the purposes set forth in sec_170 in order to be made exclusively for conservation purposes petitioners contend that the contributions satisfied the requirements of the second and third conservation purposes set forth in sec_170 to wit ii the protection of a relatively natural habitat of fish wildlife or plants or similar ecosystem iii the preservation of open space including farmland and forest land where such preservation is-- i for the scenic enjoyment of the general_public or ii pursuant to a clearly delineated federal state or local governmental conservation policy and will yield a significant public benefit in the instant cases respondent and petitioners presented expert testimony to establish their respective positions as to whether the easement areas serve the purpose of protecting relatively natural habitat pursuant to sec_170 protecting natural habitat purpose respondent offered the expert reports of curtis richardson who holds degrees in biology botany and ecology and has been a professor at duke university for years dr richardson oversaw research in the everglades and was hired by the u s state department to be the chief ecologist to evaluate marshes in iraq dr richardson’s reports are based on a review of the background materials provided by the parties an assessment of relevant literature criteria for conservation easements a field survey on date and lab analysis of collected samples petitioners offered the expert reports of james luken who holds degrees in zoology biology and botany and has been a professor of biology at coastal carolina university since dr luken has published several papers on venus flytraps and the habitats associated with the carolina bays and is a coordinator of the coastal marine and wetlands studies graduate program the reports of the parties’ experts were admitted as the expert testimony of their preparers neither party presented expert testimony to establish whether the easement areas serve the purpose of preserving open space pursuant to sec_170 either for scenic enjoyment or pursuant to a clearly delineated government conservation policy preservation of open space purpose iii burden_of_proof as a preliminary matter we consider petitioners’ contention that the burden_of_proof has shifted to respondent pursuant to sec_7491 generally the commissioner’s determination_of_a_deficiency is presumed correct and the taxpayer has the burden of proving it incorrect rule a 290_us_111 sec_7491 provides an exception that places the burden_of_proof on the commissioner as to any factual issue relevant to a taxpayer’s liability for tax the burden_of_proof shifts with respect to a factual issue pursuant to sec_7491 if the taxpayer introduces credible_evidence with respect to that issue and the taxpayer satisfies certain other conditions such as substantiation and cooperation with the commissioner’s reasonable requests for witnesses documents other information and meetings sec_7491 see also rule a the taxpayer bears the burden of proving that the requirements of sec_7491 have been met 135_tc_471 aff’d 668_f3d_888 7th cir respondent contends that petitioners have not introduced credible_evidence with respect to any of the factual issues for purposes of sec_7491 credible_evidence means evidence that ‘after critical analysis the court would find sufficient upon which to base a decision on the issue if no contrary evidence were submitted’ geiger v commissioner tcmemo_2006_271 wl at quoting 116_tc_438 aff’d 279_fedappx_834 11th cir we conclude that petitioners produced credible_evidence as required by sec_7491 with respect to whether their easements satisfied the protecting natural habitat purpose under sec_170 petitioners provided the testimony of mr branbell a longtime employee of st james plantation to testify as to the conservation goals of st james plantation as a whole mr smith and andrew johnson both of nalt to testify that the and easements furthered the conservation goals of nalt and dr luken to provide expert testimony over the condition and conservation purposes of the and easement areas on the basis of that testimony we are satisfied that petitioners have produced credible_evidence as to that purpose under sec_170 petitioners also satisfy the other conditions of sec_7491 petitioners substantiated the items in issue and maintained the necessary records and respondent conceded in his opening brief that petitioners fully cooperated during respondent’s examination of their returns accordingly the requirements of sec_7491 have been met regarding the issue of the protecting natural habitat purpose we therefore hold that the burden_of_proof shifts to respondent pursuant to sec_7491 on the issue of whether the easements satisfy the protecting natural habitat purpose requirements of sec_170 in contrast with respect to whether the easements satisfy the preservation of open space purpose under sec_170 we conclude that petitioners did not produce credible_evidence as required by sec_7491 petitioners provided no witnesses expert or otherwise to testify as to any government conservation policy furthered by the easements or any scenic enjoyment provided to the public we therefore hold that the burden_of_proof remains with petitioners with respect to the preservation of open space purpose issue under sec_170 iv relatively natural habitat to satisfy the protecting natural habitat purpose requirements pursuant to sec_170 the regulations require that the donation protect a significant relatively natural habitat in which a fish wildlife or plant community or similar ecosystem normally lives sec_1_170a-14 income_tax regs a habitat is an area or environment where an organism or ecological community normally lives or occurs or the place where a person or thing is most likely to be found 124_tc_258 quoting the american heritage dictionary of the english language 4th ed aff’d 471_f3d_698 6th cir additionally the habitat must be significant the regulations offer the following guidance with respect to what constitutes a significant habitat or ecosystem significant habitats and ecosystems include but are not limited to habitats for rare endangered or threatened species of animal fish or plants and natural areas which are included in or which contribute to the ecological viability of a local state or national park nature preserve wildlife refuge wilderness area or other similar conservation area sec_1_170a-14 income_tax regs the regulations allow for alteration of the habitat or environment to some extent human activity will not result in the denial of a deduction if the fish wildlife or plants continue to exist there in a relatively natural state id subdiv i petitioners contend that the easement and the easement satisfy the conservation requirements of the protecting natural habitat purpose petitioners contend that each easement has independent conservation significance but that it is also necessary to assess each respective easement’s role as contributing to the ecological viability of the surrounding area respondent focusing on the operation of the golf courses contends that the rights petitioners retained under the conservation deeds negate any purported conservation_purpose of the easements we address in turn each easement’s independent conservation significance its contributory role and the effect of the retained rights keeping in mind that respondent must satisfy his burden_of_proof regarding the issue a easement independent conservation significance petitioners contend that the easement protects forests ponds and wetlands which provide a variety of habitats for plants and animals of environmental concern petitioners contend that the location of the easement property within the cape fear arch supports a finding that the easement property is a significant natural habitat petitioners’ expert dr luken stated in his report that the most significant of these ecological features is the forest of longleaf pine at the margins of the fairways such trees are described as remarkable because many have been otherwise eliminated through logging damage or the absence of fire the evidence shows however that the terms of the easement do not protect the longleaf pine from removal and that the longleaf pine currently on the easement property is not maintained in a relatively natural state the easement does not protect longleaf pine because the terms of the easement allow for the removal of a large number of trees currently on the easement property it is unclear how much of the easement property is covered in longleaf pine but dr luken describes the longleaf remnants as being protected by housing development on one side and fairways on the other the houses to which dr luken refers border the easement area consequently the trees exist in a margin around the fairways of the cate golf course most of the photographs submitted into evidence including one of the photographs in dr luken’s expert report confirm the trees’ proximity to the houses and lots that border almost the entirety of the easement area under the terms of the easement deed any trees within feet of the fairways are eligible for cutting and removing because the trees exist in a thin line around the margin of the fairway a significant number of them fall within this 30-foot area the photographs submitted into evidence show that some of the trees are so near the bordering houses that they do not even appear to be on the easement property additionally the terms of the easement deed allow trees to be removed for the building of a restroom rain shelter rest station or food concession stand indeed the monitoring reports show that an emergency bridge has already been constructed on the easement area if the easement property were altered within the terms fully permitted in the easement deed the conservation_purpose would be significantly undermined our conclusion is buttressed by dr luken’s own testimony that the longleaf pine must be protected from development in general and that the habitat of the longleaf pine does not spill into the fairways the longleaf pine on the easement property does not currently exist in a relatively natural state worthy of conservation mature longleaf pine forests once included trees that grew to feet tall and feet in diameter longleaf pine trees of that size are now rare and there are none on st james plantation suggesting that none of those trees represent the old growth nalt highlighted as being important there is no management plan such as prescribed burning to ensure that the longleaf pine will reach and maintain a relatively natural state nalt highlighted the importance of active forest management such as prescribed burning longleaf pine grows in sandy soil which is generally nutrient poor fire is therefore important to a longleaf pine community because it releases nutrients and clears the understory dr luken testified that the longleaf pine has suffered in part because of the absence of fire yet there is no prescribed burning or mention of any plan for such burning on the easement property nor does st james plantation have a management plan to ensure that the cutting of shrubs and bushes mimics prescribed burning dr luken testified that he suspects st james plantation cuts shrubs growing under longleaf pine to mimic how fire clears understory in longleaf pine forests st james plantation does not however have a management strategy or program for the longleaf pine areas indeed many of the photographs of the easement area in evidence show trees with dense foliage at their base a fact to which dr luken alluded in his testimony when he stated that in the pictures if you look at some of the pictures in there you’ll see some of the pine forests that haven’t been cut back you’ll see how quickly the shrubs grow back finally even if there were such a management plan the evidence shows that simply cutting bushes does not provide the important release of nutrients that would occur in a prescribed fire petitioners contend that the easement property contains ponds which replicate the natural habitat found in the shallow ponds of boiling springs lakes and big cypress bay respondent’s expert dr richardson presented evidence that the easement property did not contain any ponds before the development of the cate golf course accordingly respondent contends that the ponds cannot provide a significant relatively natural habitat because ponds are not part of the area’s natural habitat however the regulations allow for alteration of the habitat or the environment so long as fish wildlife or plants exist in a relatively natural state sec_1_170a-14 income_tax regs the example found in the regulations is a lake formed by a man-made dam or salt pond that would meet the conservation_purpose test if the lake or pond were a natural feeding area for a wildlife community that included rare endangered or threatened native species id consequently we further analyze whether the ponds on the easement allow rare endangered or threatened native species of wildlife or plants to exist in a relatively natural state petitioners contend that the unmanicured edges of the easement ponds create a diverse community of plants and offer transition zones that provide a relatively natural habitat for amphibians reptiles and birds petitioners contend that the edges of the ponds in the easement property are particularly beneficial because they support rare plants and wildlife feeding areas however the evidence leads us to the opposite conclusion very few ponds have a natural edge during his survey of the easement area dr richardson observed that many ponds had no edge whatsoever dr luken’s report also shows ponds that have no edge or only a partial edge and he testified that in a more natural setting the transition zone would be greater the best example contained in nalt’s reports of a pond providing natural habitat was a pond where nalt’s representative heard a large southern leopard frog chorus but even that pond was identified as temporary dr luken also testified that w hen the edges are not regularly mowed or sprayed a diverse community of plants emerges which in turn provides habitat for amphibians reptiles and birds however the evidence shows that st james plantation uses pesticides on the cate golf course the easement ponds are found on or adjacent to the cate golf course fairways therefore many of the pond edges are regularly sprayed while a conservation area need only be relatively natural to satisfy the statute and the regulations it must sufficiently mimic nature so that plants and animals would be able to use it consequently when a pond in this ecosystem has no edge it does not provide even a relatively natural habitat for amphibians reptiles and birds dr richardson’s analysis of the pond water samples showed reduced oxygen increased salinity and levels of nitrogen beyond epa recommendations he testified that such conditions can lead to eutrophication which stimulates plant growth in bodies of water thus depleting dissolved oxygen dr richardson conceded that the ponds in the easement area offer potential habitat for fish and amphibians and the quality of the water would not preclude some of the native aquatic species from utilizing these ponds however he testified that he saw no fish or amphibians evident in the easement ponds petitioners’ expert dr luken testified generally that the various ponds of the easement provide critical habitat for amphibians fish reptiles and birds but he likewise did not actually testify that he observed any specific plants or wildlife in the easement pond edges dr richardson concluded as with the ponds that the land areas of the easement property provide poor habitat for plants and wildlife petitioners contend that the easement property including the rough fairways greens and tees provide a relatively natural open space for foraging migration and feeding of animals such as the eastern fox squirrel southern flying squirrels owls coyotes red foxes raccoons and opossums dr richardson however testified that there are no natural fruits and seeds for foraging on the golf course in the easement property it also provides no cover dr luken testified that some back yards of nearby houses may provide natural habitat that is as beneficial to the wildlife as the easement area however animal migration is deterred by the residential development surrounding each of the noncontiguous tracts level of human activity and the frequent watering petitioners’ expert dr luken testified that he never visited the property at night and mr smith could not speak to specific species or how they may have used different areas for roosting feeding or breeding in his baseline report on the easement property christopher wilson of nalt wrote that fish crows great blue herons and american kestrel were common however there is no indication whether these species are rare endangered or threatened or whether they depend on the ponds mr wilson did not himself see the american alligator which in any case is only observed occasionally as mentioned above mr wilson wrote that he heard a chorus of frogs but these were by the temporary pond petitioners contend that so long as the easement area provides habitat for one threatened or endangered species the easement satisfies the conservation_purpose test specifically petitioners contend that the existence of the venus flytraps and pitcher plants on the easement property are sufficient for us to conclude that the area is a significant relatively natural habitat petitioners rely on 124_tc_258 in glass the property donated was a famous roosting spot for bald eagles and the easements established a proper place for the growth and existence of lake huron tansy and pitcher’s thistle id pincite lake huron tansy pitcher’s thistle and bald eagles were all designated threatened at the time the court found that the property was in a natural undeveloped state and that the land in fact had a community of lake huron tansy pitcher’s thistle and roosting bald eagles id pincite thus in glass the court held that the taxpayers’ land contributed to protect a significant relatively natural habitat in which a fish wildlife or plant community or similar ecosystem normally lives id quoting sec_1 170a- d income_tax regs see also butler v commissioner tcmemo_2012_72 103_tcm_1359 environmental consultants testified that one threatened species lived on property in issue and described high-quality examples of ecosystems where some rare endangered or threatened species normally live however in the instant cases the easement property does not provide the same level of protection as the habitat in glass the property in glass was mostly undisturbed land the easement property unlike the property in glass is not in a natural undeveloped state the fairways tee boxes and greens within the easement area are sodded or planted with bermuda and tidwarf which are nonnative grasses and consequently do not provide a relatively natural habitat for the pitcher plants and venus flytraps water and soil samples taken from the members club golf course show more intensive management ie nonnatural as compared to non-golf-course areas respondent’s expert dr richardson provided photos of soil samples from the fairway on cate and the adjacent pine forest next to the fairway the soil from the pine forest is twice as deep as well as different in color mr smith of nalt provided contradictory testimony over whether the pitcher plants and venus flytraps are found in the heavily managed fairways consequently the easement property is not a proper place for the growth and existence of venus flytraps and pitcher plants although the easement property is not ideal for the venus flytraps petitioners provided photos of venus flytraps and pitcher plants actually found on the property nonetheless if the plants are found only on the areas excluding the fairways tee boxes and greens that area constitutes only of the easement property even if the transition areas between the more undisturbed land and the fairways of the easement property is the ideal habitat for the venus flytrap that area represents too insignificant a portion of the easement to lead us to conclude that the whole easement property is a significant natural habitat highlighting this fact the nc natural heritage program map in the baseline report did not identify any venus flytrap plants on the easement property moreover the species on the glass property were threatened or endangered pitcher plants and venus flytraps are rare but not designated threatened or endangered the regulations provide that a significant habitat includes habitats for rare plants but we are mindful that petitioners’ own documentation shows that the species on the easement property are classified only one step above apparently secure and do not reach the level of i mperiled globally because of rarity respondent contends that the easement property is not relatively natural because petitioners spray pesticides insecticides fungicides herbicides and fertilizers on the fairways greens tees and rough it is undisputed that the golf courses use chemicals on roughly of the easement property in the operation of the golf course sec_1_170a-14 income_tax regs provides the following guidelines regarding the use of pesticides t he preservation of land would not qualify under paragraph d of this section if under the terms of the contribution a significant naturally occurring ecosystem could be injured or destroyed by the use of pesticides accordingly we consider whether the pesticides could injure or destroy the ecosystem of the easement property respondent’s expert dr richardson concluded that the golf courses’ use of various chemicals injures the ecosystem of the easement property in preparing his report dr richardson reviewed various data about the easement some which he personally collected and others provided by petitioners as noted in his report the main pesticide used on the easement property oxadiazon can run off when applied in porous soils such as the soil in the easement property dr richardson states that oxadiazon runoff accumulates in bodies of water where it is toxic to fish and aquatic invertebrates additionally the main insecticide in use on the easement property is bifenrin which is a possible human carcinogen bifenrin is generally toxic to mammals and birds but more importantly it is toxic to beneficial nontarget species such as bees the fungicide that is used on the easement property has negative effects on habitat as well as mentioned above water samples from the easement property showed reduced oxygen increased salinity and levels of nitrogen beyond epa recommendations also as noted above nutrient runoff can lead to eutrophication which stimulates plant growth in bodies of water thus depleting dissolved oxygen it is clear from the testimony of dr richardson that the chemicals used on the easement property promote the maintenance of nonnative flora without regard for any conservation_purpose of the easement the original we note that petitioners’ witness conrad broussard who works on the golf courses at st james plantation provided further support for the proposition when he testified that the goal in irrigation and the use of pesticides fungicides and herbicides is to keep the golf course in good condition for playing golf and to try continued landscape of the easement area has been replaced with nonnative grasses for the golf course the easement deed requires the owner of the property to exercise the best environmental practices then prevailing in the golf industry not the best environmental practices then prevailing for conservation as might be expected if conservation was the purpose of the easement the easement deed qualifies the owner’s reserved rights eg allowing the property owner to modify the golf course provided that no such activity shall have a material adverse effect on the conservation_purpose however the easement deed allows for_the_use_of chemicals in the maintenance and operation of the golf course and the nalt baseline and monitoring reports provide no way of assessing the possible damage caused by those chemicals accordingly the easement deed does not in actuality limit the use of pesticides and chemicals that may destroy the conservation_purpose petitioners’ expert dr luken did not testify that the effects of chemicals used on the easement property were benign instead dr luken concluded only generally that the species he observed on the properties did not appear affected by the chemicals and that dr richardson showed only that chemicals continued to keep the turf healthy were used not that they had any deleterious effect on plants or wildlife we do not give weight to dr luken’s conclusion however because of the basis on which it is drawn dr luken determined that soil and water samples were irrelevant to characterizing natural habitat involving plants and animals he did not take any soil or water samples from the easement property and did not analyze the samples that dr richardson provided to him despite having published research on the varying effects of herbicides’ application techniques on target and nontarget species dr luken did not investigate the types or amounts of pesticides fungicides fertilizer or herbicides used on the easement property moreover when preparing the baseline report nalt did not consider the use of chemicals on the easement property such a lack of investigation and consideration of chemical usage by petitioners’ experts would make it difficult if not impossible to assess the long-term impact of chemical use on the easement property without any baseline documentation regarding the chemicals’ effect on the easement area there would be no way for nalt to monitor whether there was any change in soil or water conditions we conclude from dr richardson’s testimony that the use of pesticides and other chemicals could injure or destroy the ecosystem and therefore runs counter to the provisions of sec_1_170a-14 income_tax regs on the basis of the foregoing we conclude that wildlife and plants are not most likely to be found or do not normally live on the easement property contributory role petitioners also contend that the easement property meets the requirements of the relatively natural habitat purpose and cite sec_1 170a- d i income_tax regs which provides that s ignificant habitats and ecosystems include natural areas which contribute to the ecological viability of a local state or national park nature preserve wildlife refuge wilderness area or other similar conservation area the easement was designed in part to contribute to a wider set of easements that st james plantation issued to nalt specifically parts of the easement property are adjacent to the middle swamp easement for the easement to qualify as a significant habitat and ecosystem because of its contributory benefits to the middle swamp therefore the easement property must in the terms of the regulation be a natural area that contributes to the middle swamp and the middle swamp must be a nature preserve wildlife refuge wilderness area or other similar conservation area id petitioners have presented evidence that the middle swamp and other undeveloped areas within the st james plantation rise to the level of a wilderness area or other similar conservation area we cannot conclude however that the easement property is a natural area that contributes to the middle swamp or surrounding undeveloped areas we reiterate our analysis above which explains why the easement not only does not qualify as a relatively natural habitat but also does not quite qualify as a natural habitat a large portion of the easement property is planted with nonnative grass the ponds do not exist in a relatively natural state and the native forests that do remain on the easement property are at risk of removal pursuant to the terms of the easement deed moreover the easement property does not act as a wildlife corridor or sink for any species as petitioners contend there are no natural fruits and seeds for foraging or cover from humans or predators and there are barriers to animal migration such as the surrounding homes human activity and nightly watering neither petitioners’ expert dr luken nor mr smith could identify or testify as to any specific species that he personally observed using the easement property for nocturnal migration petitioners contend that the state of the easement area is irrelevant so long as it can act as a buffer to a nearby significant habitat petitioners rely on sec_1_170a-14 example income_tax regs which states in pertinent part as follows a qualified conservation organization owns greenacre in fee as a nature preserve greenacre contains a high quality example of a tall grass prairie ecosystem farmacre an operating farm adjoins greenacre and is a compatible buffer to the nature preserve conversion of farmacre to a more intense use such as a housing development would adversely affect the continued use of greenacre as a nature preserve because of human traffic generated by the development the owner of farmacre donates an easement preventing any future development on farmacre to the qualified conservation organization for conservation purposes normal agricultural uses will be allowed on farmacre accordingly the donation qualifies for a deduction under this section the easement in the instant cases and farmacre in the regulation’s example however are distinguishable the easement property is not a compatible buffer to the middle swamp or the nearby undeveloped land in the way that farmacre is to greenacre most of the easement property is surrounded by a row of houses overlooking the golf course the easement property therefore cannot provide a buffer since development already exists between the easement area and the other natural areas the one area that is not separated by houses abuts the middle swamp and constitutes roughly one-third of the easement property however dr luken’s report does not identify the middle swamp as a beneficiary of the easement instead his report identifies green swamp preserve and boiling springs neither of which is on the easement property or adjacent to it additionally respondent’s expert dr richardson identified heavy human traffic on and around the golf course as one feature of the easement property that diminishes the benefits of a buffer example in the regulation specifically alludes to the increased human activity in farmacre if it were developed as a detriment to greenacre in the instant cases as it would be with farmacre the easement property’s human activity level is a detriment not a benefit to the adjacent property we conclude from the record that as a whole the easement property does not contribute to any conservation area nearby retained rights sec_1_170a-14 income_tax regs prohibits inconsistent use of the contributed easement and provides that a deduction will not be allowed if the contribution would accomplish one of the enumerated conservation purposes but would permit destruction of other significant conservation interests respondent contends that operating a golf course is inherently inconsistent with the conservation_purpose of protecting relatively natural habitat however we do not need to decide in the instant case whether an operating golf course is inherently inconsistent with conservation purposes under sec_170 to implicate sec_1_170a-14 income_tax regs the contributed easement must as a threshold have a qualifying conservation_purpose as we have concluded above that the easement property does not preserve a relatively natural habitat we need not address the issue of whether an operating golf course is inherently inconsistent with the conservation_purpose of preserving a significant relatively natural habitat b easement independent conservation the easement while it would appear to be a stronger case for petitioner reserve development co suffers from the same problems as the easement respondent’s expert dr richardson estimates that of the easement property comprises undisturbed woodland which is similar to the stipulated exhibit showing of the easement area covered by wetlands petitioners’ expert dr luken testified to the presence of longleaf pine remnants on the easement and some of the easement photographs show lusher undisturbed areas however those same photographs show the reemergence of mowed grass a short distance away highlighting the narrow character of many of such tree clusters as with the easement property many of the trees on the easement area are at risk of removal because the easement deed allows for the removal of any trees within feet of the fairway and for the benefit of building certain structures dr luken repeats his assessment that the longleaf pine remnants are protected by housing development on one side and fairways on the other nalt categorized the primary adjacent land as residential or golf at least half of the easement property’s borders appear to abut residential lots and many of the longleaf pines are placed on or at the edge of houses’ backyards we reiterate our analysis above regarding the easement dr luken conceded that longleaf pine should be protected from development in general and there is a generous amount of development surrounding the easement area as with the easement property dr luken references the management that he suspects goes on to remove woody plants and encourage the growth of grasses and herbs with the goal of mimicking prescribed burning of the easement property nalt also highlighted the benefits of active forest management yet there is no management plan to mimic prescribed burning or preserve the longleaf pine areas on the easement property petitioner contends that the easement property includes portions of polly creek and an unnamed tributary of beaver dam creek however dr richardson directly refutes that contention and none of the maps submitted to the court identify either of those bodies of water additionally petitioner contends that the ponds provide the necessary edge for many plants to thrive such habitat could be significant because the easement property is found within the boiling springs lake complex although dr richardson acknowledged that the ponds theoretically offer habitat for native fish and amphibians he qualifies that statement with none of these species were seen or heard on the site visit dr richardson observed that the easement ponds have decreased plant diversity compared to the adjacent wetlands ii easement ponds because they are isolated in pockets separated by the golf course houses and concrete path dr richardson included photographs in his report comparing the edges on the easement property and wetlands ii and the difference is compelling one photograph shows a house built on the edge of one of the ponds precluding any potential for a natural transition area the photographs in the nalt baseline and compliance reports also show sparse edges as with the ponds on the easement eutrophication is a concern because the same chemicals are used on both easement properties’ golf courses we conclude that the lack of an edge and the risk of the chemical use means that the ponds do not exist in the kind of natural state that would provide a significant natural habitat for plants and wildlife moreover there is no aquatic features management plan which the nalt baseline report recommended dr richardson observed very little wildlife on the easement property the only birds he saw were geese which st james plantation attempts to control ie eliminate from the easement property using a border collie squirrels may run through the golf course on the easement property but there is no evidence that the southern fox squirrels identified by dr luken and dr richardson are a species of concern the squirrels may in fact be eastern fox squirrels as nalt’s reports suggest but even then there is no indication that they are threatened or endangered by national standards rather the eastern fox squirrel is designated significantly rare by the state of north carolina nalt does not list the squirrel as a special status species on reports assessing the easement the nalt report mentioned the red-cockaded woodpecker but stated only that the easement area provided the potential for a habitat petitioners contend that animals use the easement property at night but neither dr luken nor nalt representative mr smith ever observed the area at night and mr smith could not testify as to specific species or how they may have used one area for roosting or feeding and another area for breeding and saw no denning sites mr smith testified that on his most recent visit he saw a bald eagle fly overhead while he was on the easement property in glass v commissioner t c pincite the testimony established that the property there in issue was famous as a roosting spot for eagles in the instant cases however there is no evidence that bald eagles roost on the easement property we do not equate one sighting of a bald eagle flying over the property with a conclusion that the area is famous as a roosting spot for eagles roughly half of the easement property supports populations of venus flytraps and pitcher plants while the plants cannot grow on the fairways or mowed parts of the rough they can and do grow on the of the easement property designated other and wetlands such facts however are insufficient for us to conclude that the easement property qualifies as a significant relatively natural habitat as discussed above this partial provision of a proper place for growth is insufficient to justify protecting the entire easement area and the status of venus flytraps and pitcher plants is not sufficiently dire to qualify as imperiled petitioners presented evidence that an american alligator federally designated threatened frequents two golf course holes the nalt reports are unclear however about where the american alligator has been seen the reports cover several golf courses and specify only the holes by which the alligator has been seen not which golf course most importantly in the instant cases respondent has shown that the easement property is not relatively natural because most species cannot use it as a travel corridor much less a habitat the soil quality differs from that of surrounding undeveloped areas the ponds lack edge many of the protected flora are at risk of removal and the operators of the golf course apply a variety of chemicals to the area without consideration of their impact on the environment contributory role dr luken determined that when taken as a whole the easement property and wetlands ii habitats represent the full range of ecological communities typically found in the carolina bay wetland to upland complex we think that such a statement misses the point of the contributory role qualification the easement property does not provide sufficient contributory benefits to qualify as a significant natural habitat by virtue of its proximity to the wetlands ii easement of the easement property’s three tracts only one portion of one tract directly borders wetlands ii dr richardson explicitly countered each of the contributory benefits petitioners contend the easement property provides to the wetlands ii easement as with the easement property petitioners contend that the state of the easement area is irrelevant so long as it can act as a buffer to a nearby significant habitat see sec_1_170a-14 example income_tax regs the easement property and example of farmacre in the regulations however are distinguishable while wetlands ii may be a high-quality example of undeveloped land in the cape fear arch the easement property is not a compatible buffer to wetlands ii in the way farmacre is to greenacre in the regulation’s example petitioners contend that the easement property provides wildlife corridors that benefit wetlands ii and that we should evaluate the easement property as a whole to determine how it contributes to the carolina bays ecosystem however in that case we would also consider the houses separating the easement from the carolina bays the houses isolate parts of the easement property eg hole sec_2 and from wetlands ii and other undeveloped land dr richardson testified that the housing lots daily presence of humans concrete paths and lack of fruits and seeds for foraging reduce the easement property’s contribution as a wildlife corridor additionally the same chemicals are applied to the easement property golf course as to the easement property golf course so there are risks of chemical runoff on the basis of our analysis above and the record as a whole in the instant cases we conclude that the easement property does not provide a contributory benefit to the wetlands ii easement retained rights as with the easement property we need not decide with respect to the easement property whether an operating golf course is inherently inconsistent with conservation purposes of preserving a relatively natural habitat under sec_170 because we have concluded that the easement property is not a relatively natural habitat petitioners do not meet the threshold requirement of qualifying for a conservation_purpose we therefore need not determine whether any inconsistent use on the easement property negates any qualification under sec_170 see sec_1_170a-14 income_tax regs v open space we next address whether either the or the easement property qualifies for the conservation_purpose of preserving open space pursuant to sec_170 or ii pursuant to that section the easement must either be pursuant to a clearly delineated federal state_or_local_government conservation policy sec_170 or be for the scenic enjoyment of the general_public id subdiv i in either case the preservation of open space must also yield a significant public benefit sec_170 sec_1_170a-14 income_tax regs as noted above we conclude that petitioners did not produce any credible_evidence with respect to whether either of the easements satisfies the conservation_purpose of preserving open space and therefore the burden_of_proof remains with petitioners and does not shift pursuant to sec_7491 petitioners have failed to establish any clearly delineated governmental policies that apply to either easement area the baseline documents for both of the easements list several north carolina laws but include no explanation for how the areas contribute to the purposes stated in those laws petitioners do not provide any analysis nor do they mention any government policies in their briefs and so we deem the clearly delineated conservation policy argument abandoned the preservation of land may be for the scenic enjoyment of the general_public if development of the property would interfere with a scenic panorama that can be enjoyed from a park nature preserve road waterbody trail or historic_structure or land area and such area or transportation way is open to or utilized by the public sec_1_170a-14 income_tax regs scenic enjoyment is evaluated by considering all pertinent facts and circumstances germane to the contribution id while the entire property does not have to be visible to the public the benefit from the donation may be insufficient to make a deduction allowable if only a small portion of the property is visible to the public id subdiv ii b in the instant cases petitioners have failed to establish that either easement area exists for the scenic enjoyment of the general_public or yields a significant public benefit see sec_170 to access any of the golf courses a visitor must be a member of st james plantation or an invited guest of a member a large portion of the and easement properties is covered by golf courses the public may be able to drive into st james plantation but guards at the three gate houses control access to the development because the parties have failed to present any evidence regarding the guards’ criteria for allowing people to enter we have no basis on which to conclude that the general_public has access to st james plantation roads which would provide access to the easement areas petitioners contend that the regulations require only that the public have visual access not physical access see sec_1_170a-14 d ii b income_tax regs however the record is devoid of any evidence that the public has even visual access we are unable to conclude from the record that the easement areas are visible from public highways or waterways petitioners contend that the general_public does have visual access to the easement areas regardless of the presence of guards because the areas are visible from the roads within st james plantation and most of the population of the town of st james lives within st james plantation we are not persuaded we do not impute access to st james plantation to the public at large simply because most of the town population lives within st james plantation moreover both easement areas are ringed by houses suggesting that even if a visitor gained access to the easement areas scenic enjoyment of the easement areas from the st james plantation roads would be limited these barriers to visual access could be a likely reason that neither the easement deed nor the easement deed lists the scenic enjoyment of the general_public as a conservation_purpose preservation of land may be for the scenic enjoyment of the general_public if development of the property would interfere with a scenic panorama that can be enjoyed from the local landscape id subdiv ii however as we discussed above regarding the protecting natural habitat purpose the record establishes that most of the easement areas do not preserve the scenic character of the local landscape while there are patches of native vegetation and wildlife golf courses and the homes surrounding much of each easement area interrupt the natural scenic character the easement areas are primarily man made and are neither natural nor historic petitioners have failed to present any evidence showing that the easements were made pursuant to a clearly delineated government conservation policy or for the scenic enjoyment of the general_public considering all facts and circumstances we conclude that petitioners have not met their burden of proving the easement and the easement or either of them preserve open space as defined by sec_170 vi penalties respondent determined that petitioners were liable for accuracy- related penalties under sec_6662 and b and for underpayments due to negligence or disregard of rules or regulations substantial understatements of income_tax or substantial valuation overstatements and to the extent that a portion of any underpayment was attributable to a gross_valuation_misstatement an increased penalty of under sec_6662 in any court_proceeding with respect to the liability of an individual the commissioner bears the burden of production on the applicability of the accuracy-related_penalty in that he must come forward with sufficient evidence indicating that it is proper to impose the penalty see sec_7491 see also higbee v commissioner t c pincite in the case of a partnership however it is not clear whether the commissioner bears the burden of production see seismic support servs llc v commissioner tcmemo_2014_78 at ndollar_figure discussing the court’s varied treatment of whether sec_7491 is inapplicable where the taxpayer is not an individual however in the instant cases even if respondent has met his burden of production we conclude that petitioners are not liable for the penalty because petitioners acted with reasonable_cause petitioners contend that they qualify for the reasonable_cause defense of sec_6664 pursuant to that section accuracy-related_penalties under sec_6662 do not apply to any portion of an underpayment for which a taxpayer establishes that he or she had reasonable_cause and acted in good_faith whether taxpayers acted with reasonable_cause and in good_faith depends on the pertinent facts and circumstances including their efforts to assess their proper tax_liabilities their knowledge and experience and the extent to which they relied on the advice of a tax professional sec_1_6664-4 income_tax regs reliance on professional advice may constitute reasonable_cause and good_faith but it must be established that the reliance was reasonable 89_tc_849 aff’d on another issue 904_f2d_1011 5th cir aff’d 501_us_868 sec_1_6664-4 income_tax regs reliance on an adviser is reasonable if the adviser had the expertise to justify reliance the taxpayer provided all necessary and accurate information to the adviser and the taxpayer actually relied in good_faith on the adviser’s judgment 115_tc_43 aff’d 299_f3d_221 3d cir advice includes any communication setting forth the analysis or conclusion of a person other than the taxpayer provided to or for the benefit of the taxpayer and on which the taxpayer relies directly or indirectly with respect to the imposition of the sec_6662 accuracy-related_penalty sec_1_6664-4 income_tax regs we agree with petitioners that they acted with reasonable_cause and in good_faith petitioners worked with nalt to formulate a plan for creating the conservation easements the nalt employees who inspected the easement areas and testified at trial hold degrees in biology and were qualified to make assessments about preserving the natural attributes of st james plantation petitioners provided nalt all the necessary and accurate information by making the land available for on-site assessments and inspections we conclude that petitioners relied in good_faith on nalt’s advice and judgment that placing easements on the areas nalt deemed worthy of protection complied with the conservation_purpose of protecting relatively natural habitat in the case of a substantial or gross_valuation_overstatement with respect to property for which a charitable_contribution_deduction was claimed under sec_170 a taxpayer must also show that the claimed value of the property was based on a qualified_appraisal by a qualified_appraiser and that the taxpayer made a good-faith investigation of the value of the property sec_6664 the record supports petitioners’ contention that they relied on a qualified_appraisal by a qualified_appraiser see dunlap v commissioner tcmemo_2012_126 reliance on qualified_appraisal prepared by qualified_appraiser constituted reasonable_cause east llc v commissioner tcmemo_2011_84 considering taxpayer’s appraisal as evidence of reasonable_cause and good_faith evans v commissioner tcmemo_2010_207 attached to the forms filed by the members club and the reserve club were appraisals by mr sauter respondent does not contest that the appraisals were qualified appraisals under sec_170 which were prepared by a qualified_appraiser under sec_170 i - iii in attaching the appraisals to their tax returns petitioners demonstrated good-faith reliance on the appraisals furthermore the testimony of ms wright who has experience in commercial real_estate and found no inconsistencies in mr sauter’s report supports the conclusion that petitioners made a good-faith investigation of the values of the easements and relied on the appraisals in good_faith we conclude that petitioners’ reliance on mr sauter nalt and other advisers satisfies the reasonable_cause defense requirements of sec_6664 consequently we hold that petitioners are not liable for the accuracy-related_penalties under sec_6662 vii conclusion petitioners have not satisfied the requirements of sec_170 and therefore are not entitled to deductions for qualified conservation contributions they are not however liable for the accuracy-related_penalties or gross_valuation_misstatement penalties we have considered all of the parties’ contentions arguments requests and statements to the extent not discussed herein we conclude that they are meritless moot or irrelevant to reflect the foregoing decisions will be entered under rule