That’s the only way I can explain why this story didn’t come out during the GOP primary.
Republican US Senate nominee Gabriel E. Gomez claimed a $281,500 income tax deduction in 2005 for pledging not to make any visible changes to the facade of his 112-year-old Cohasset home, a concession so valuable that it is classified as a charitable contribution under a federal law designed to protect historic homes.
But Gomez and his wife, Sarah, were already barred from making any changes to the exterior of their home under the bylaws of the local Historical Commission, raising the question as to whether their donation — the price of which is based on the loss of value in their real estate — had any monetary worth.
The Gomezes, whose 59 Highland Ave. home is located within the Cohasset Common Historic District, gave the historical easement to the National Architectural Trust, a Washington-based organization whose marketing of tax-deductible easements to homeowners has been targeted by the US Department of Justice.
Five weeks after the Gomezes claimed the deduction, the Internal Revenue Service listed programs such as this — that involve the “contribution of a historic facade easement to a tax-exempt conservation organization” — as one of its “Dirty Dozen tax scams.”
One specialist in conservation easement law, Scott Knott, a tax partner in The Ferraro Law Firm in Washington, D.C., said that if easements mandated by local laws are already in place, homeowners have nothing to claim as a tax deduction.
“The key is the valuation of the easement and if there is already a restriction on the property, the value is not diminished by the easement,” said Knott. “The value of any easement that has the same restriction already in place is zero.”
Dean Zerbe, former senior counsel for the Senate Finance Committee, who investigated abusive tax breaks, asserts the deduction for facade easements is “unconscionable” because it is almost exclusively for the “one percent…. It is wealthy people playing fast and loose.”
A Senate Finance Committee inquiry, which led to some reforms in 2006 in the program and tightened up procedures, prompted criticism on Capitol Hill of the nonprofit historic preservation firms that were marketing the tax deduction.
“It is very discouraging to find yet another example of snake oil salesmen misusing tax-exempt status and abusing the tax laws intended to encourage charitable giving, all for the purpose of making a fast buck,” [Republican Senator Charles] Grassley, then chairman of the Committee on Finance, said in a December 2004 press release.
Of course, the notion that someone should receive a tax deduction of nearly $300,000 for promising not to do what they can’t do anyway is absurd on its face, and that’s why the IRS targeted this particular tax scam as one of its “dirty dozen.” And the fact that Republicans like Chuck Grassley hate this particular deduction is further evidence of how sleazy it is.
Mike Sullivan and Dan Winslow must be kicking themselves over this.