“Uncovering Tax Scams: The Billion-Dollar Loophole Exposed by ProPublica”

The General Services Administration (GSA) has recently appointed Frank Schuler IV, the co-founder and former president of Ornstein-Schuler, as a senior adviser. Schuler’s firm was known for promoting tax-shelter deals called “syndicated conservation easements,” which have been criticized by the IRS and bipartisan Senate committees as abusive tax scams. These deals involved exploiting a tax deduction meant to reward landowners who give up development rights for their land.

Schuler and his firm turned this tax provision into a profitable business by selling stakes in easement donations to wealthy individuals, who claimed inflated tax deductions based on appraisals of the land’s development value. This practice has cost the government billions in tax revenue and has been the subject of numerous audits, court cases, and legislative actions to curb it.

Despite the scrutiny and legal battles surrounding syndicated conservation easements, Schuler has defended his transactions as legitimate and well-intentioned. Ornstein-Schuler dropped out of the syndicated-easement business in 2019 and shifted focus to other real estate and tax ventures.

However, legal disputes over the disallowed charitable deductions from these transactions continue, with Ornstein-Schuler contesting over $4 billion in deductions for thousands of investors. A recent tax court decision ruled against Schuler’s firm, disallowing a significant portion of the claimed deductions and imposing penalties.

Ornstein-Schuler is also facing a federal class-action lawsuit filed by investors alleging a fraudulent scheme involving inflated appraisals and misrepresentations. The firm has filed a motion to dismiss the case, denying any wrongdoing.

In a separate legal action, Ornstein-Schuler has sued the IRS for failing to respond to a Freedom of Information Act request, claiming abuses in targeting conservation easement transactions. The firm’s lawsuit seeks communication records between IRS employees and members of the media, including journalists covering conservation easements.

The appointment of Schuler as a senior adviser to the GSA has raised concerns among lawmakers and critics, given his involvement in controversial tax transactions. The exact role Schuler will play in the government remains unclear, but his past dealings and ongoing legal battles have drawn attention to his appointment.

Overall, the appointment of Frank Schuler IV as a senior adviser to the GSA highlights the complexities and controversies surrounding syndicated conservation easements and the individuals involved in promoting these tax schemes. The legal battles and criticisms surrounding these transactions continue to unfold, raising questions about accountability and oversight in tax-related matters.