I can assure you that tangling with the two biggest law firms in Denver was not on our bucket list of bright and happy things to do. It wasn’t glamorous, it wasn’t fun, and it was definitely the last thing in the world we wanted to do. But there we were, dealing with our new reality.
By now we were drifting into 2010. Be forewarned that the year yielded an incredible jumble of issues with the State, the IRS, and the malpractice case. It has been a challenge to try to sort out these matters and present them in a way that is comprehensible, so, for the time being I am going to stick with chronology. If you feel like the paragraphs in this post jump around like a pinball, you are right! But remember, chronology is the glue.
STATE: We were greeted by the news on January 24, 2010, that Colorado Governor Bill Ritter would “oppose any legislation to grant amnesty to hundreds of Coloradans whose tax credits for conservation easements are being challenged by federal and state authorities.” (The Denver Post, “Ritter rejects tax amnesty for conservation easement credits.” And http://statebillnews.com/2010/01/ritter-ill-oppose-conservation-easement-tax-amnesty/)
Land Owner’s United
We discovered that there was a group of landowners who had banded together to fight back against the state on this whole subject. They were mostly situated in southern Colorado, and they faced the same issues we did. They had formed a group called Land Owners United (LOU), and, while it was sad to discover that other people were suffering from the same thing we were, it was also thrilling to discover that we weren’t alone, we weren’t crazy, and we all had the same problems and experiences.
Here’s a more official description of the group, taken from a letter from their attorney to the Colorado Department of Revenue. “Land Owners United (LOU) is a nonprofit organization formed to assist landowners, many of them in Southern Colorado, with the calamitous impacts caused by gross mismanagement of the conservation easement program and tax credits by the Colorado Division of Real Estate and the Colorado Department of Revenue.”
LOU strongly supported the abovementioned HB 10-1169 introduced by State Representative Wes McKinley and co-sponsored by Speaker of the House, Terrance Carroll. Essentially the bill proposed “grandfathering” all 2003-2007 conservation easements, and putting an “end” to the debacle. Now the bill was in jeopardy of dying before getting to the finance committee, and LOU was working to mobilize people to write letters. While we have never officially joined LOU, we developed a very close working relationship with them, so they become an important part of this story. LOU is also the same group behind the current lawsuit against the State of Colorado that I mentioned in Blog Post #1 (LOU created a new group for this lawsuit called Landowner’s United Advocacy Foundation, Inc. [LUAF] with more than 300 members. See their website at http://www.landownersadvocacy.org/home.html). And, as a reminder, here is a link to the article first mention in Blog Post #1. (http://www.denverpost.com/2016/03/28/colorado-landowners-sue-state-over-conservation-easement-program/)
IRS: As you may recall, the IRS had begun requesting time to extend their investigation, and on the advice of both JW and then A&J, we told the partners to refuse.
On Feb. 20, 2010, our partner who had received the first notices from both the IRS and State received a Notice of Tax Deficiencies from the IRS for 2005, 2006, 2007 totaling $137,211.80 (including the 40% penalty they were tacking on). Quick question, Dear Reader: would you be upset – maybe even faint -- if you received that notice?
STATE: The excesses of Erin Toll finally began to be recognized and make headlines. (Click here for a Denver Post article dated 3/20/2010: “Real Estate Division dispute highlights differences in governance.”) This kind of information reinforced our conviction that we didn’t need to sue Todd – that it was a witch hunt originated by Erin Toll, and that it would die down. Our biggest failing? We were optimists…
A series of negative articles about Erin Toll ensued, with startling quotes such as this: "She was an unguided missile that always sought the headline." Former Gov. Bill Owens describing Erin Toll, (The Denver Post – see attached .pdf below for the whole series of articles.)
IRS: At the end of March and beginning of April, our partners started to notify us that they, too, had received “Notices of Tax Deficiency” from the IRS -- notices saying they owed a ton in back taxes, due to their deduction for the conservation easement being disallowed, plus penalties (a whopping 40% and interest). All of our donating partners.
STATE: On April 9, 2010, we read that Land Owners United (LOU) had won their Open Records Request in Denver District Court Division 9. “The Colorado Division of Real Estate and the Colorado Board of Real Estate Appraisers unlawfully withheld records and failed to respond to repeated, written requests for public records made by a group of Southeast Colorado property owners in August and September of 2009, a Denver District Court judge recently decided.” http://www.denverrealestatewatch.com/2010/04/09/land-group-wins-court-decision/
I have verified with LOU that this decision was appealed by The Division of Real Estate (Erin Toll), but Land Owners United won again on appeal in August of 2011. Unfortunately, links to that decision have disappeared. If you have a link, please send it to me so I can add it! Thanks.
IRS: On April 12, 2010 A&J wrote a lengthy letter to all our partners detailing the long process of dealing with the IRS in Tax Court, and then added, “This, however is not the end of the controversy. This is actually the beginning.” How’s that for cheerful news from your attorney?
MALPRACTICE: As we were grinding our way through these IRS cases that spring, we began to catch a new scent – that maybe Todd’s work had not been as thorough as it should have been. We began to contemplate the ugly fact that we might have to actually sue Todd and the Major Law Firm.
In May, Stan told A&J to go ahead and file a malpractice suit against Todd and Wishful Thinking, and A&J began corresponding with MLF (remember them?) who represented Todd and Wishful Thinking. Dear Readers, Wishful Thinking and Major Law Firm are two of the biggest law firms in Denver. I can assure you that tangling with them was not on our bucket list of bright and happy things to do. It wasn’t glamorous, it wasn’t fun, and it was definitely the last thing in the world we wanted to do. But there we were, dealing with our new reality.
STATE: And, at the same time, another article came out supporting what we had always known – Erin Toll was a problem. See “The Rise and Fall of Erin Toll: Colorado Regulator with a Tough Reputation” May 7, 2010. “http://www.denverpost.com/2010/05/07/the-rise-and-fall-of-erin-toll-colorado-regulator-with-a-tough-reputation/
In June of 2010, I move from one unsuitable job In Denver to another – a full time position with benefits. We desperately needed the money and with Stan tied up with construction on our house and spending money like crazy, I needed to plug the financial holes. Little did I know I was just throwing myself under the bus as far as more abuse and craziness! The new job was so busy I couldn’t even take potty breaks. More stress – just what I needed.
The day before I was supposed to start the new job, I got stung by a bee at our construction home in Walsenburg just as I was leaving for my drive back to Denver. When I started the new job the next day, I was really sick, and covered with red splotches everywhere. I hauled my brand new coworker (a nurse) into the bathroom with me and pulled down my pants to show her my pink waffled butt. “Honey,” she said, “those are hives – you’re just covered in hives. You better get yourself to the ER right now.” Even my throat and lungs felt furry. I was having an extreme allergic reaction and I probably should have been in the ER, but desperate to keep this new job, I foolishly soldiered through the day. Desperation will cause one to do crazy things.
The new job required me to stay five days a week in Denver, then make a mad three-hour-plus dash on weekends down to the work site where we were building our home south of Walsenburg. The job was extremely stressful, the commute was taxing, and I felt as if everything would fall apart if I blinked.
In addition to all the matters related to the conservation easements, we had a lot of demanding personal stuff going on. We were building our own home, and it was a major project in and of itself. It’s not the subject of this blog, but I hope it helps the reader appreciate that in addition to all this C.E. stuff, we had personal lives that frequently felt like they were falling apart due to the impact on our time. Not to mention that this onslaught had already been a long, tough slog. My nerves were getting frazzled, I was beginning to have chest pains, panic attacks, physical issues -- I was just plain miserable. ©Sharon Cairns Mann
STATE: We were greeted by the news on January 24, 2010, that Colorado Governor Bill Ritter would “oppose any legislation to grant amnesty to hundreds of Coloradans whose tax credits for conservation easements are being challenged by federal and state authorities.” (The Denver Post, “Ritter rejects tax amnesty for conservation easement credits.” And http://statebillnews.com/2010/01/ritter-ill-oppose-conservation-easement-tax-amnesty/)
Land Owner’s United
We discovered that there was a group of landowners who had banded together to fight back against the state on this whole subject. They were mostly situated in southern Colorado, and they faced the same issues we did. They had formed a group called Land Owners United (LOU), and, while it was sad to discover that other people were suffering from the same thing we were, it was also thrilling to discover that we weren’t alone, we weren’t crazy, and we all had the same problems and experiences.
Here’s a more official description of the group, taken from a letter from their attorney to the Colorado Department of Revenue. “Land Owners United (LOU) is a nonprofit organization formed to assist landowners, many of them in Southern Colorado, with the calamitous impacts caused by gross mismanagement of the conservation easement program and tax credits by the Colorado Division of Real Estate and the Colorado Department of Revenue.”
LOU strongly supported the abovementioned HB 10-1169 introduced by State Representative Wes McKinley and co-sponsored by Speaker of the House, Terrance Carroll. Essentially the bill proposed “grandfathering” all 2003-2007 conservation easements, and putting an “end” to the debacle. Now the bill was in jeopardy of dying before getting to the finance committee, and LOU was working to mobilize people to write letters. While we have never officially joined LOU, we developed a very close working relationship with them, so they become an important part of this story. LOU is also the same group behind the current lawsuit against the State of Colorado that I mentioned in Blog Post #1 (LOU created a new group for this lawsuit called Landowner’s United Advocacy Foundation, Inc. [LUAF] with more than 300 members. See their website at http://www.landownersadvocacy.org/home.html). And, as a reminder, here is a link to the article first mention in Blog Post #1. (http://www.denverpost.com/2016/03/28/colorado-landowners-sue-state-over-conservation-easement-program/)
IRS: As you may recall, the IRS had begun requesting time to extend their investigation, and on the advice of both JW and then A&J, we told the partners to refuse.
On Feb. 20, 2010, our partner who had received the first notices from both the IRS and State received a Notice of Tax Deficiencies from the IRS for 2005, 2006, 2007 totaling $137,211.80 (including the 40% penalty they were tacking on). Quick question, Dear Reader: would you be upset – maybe even faint -- if you received that notice?
STATE: The excesses of Erin Toll finally began to be recognized and make headlines. (Click here for a Denver Post article dated 3/20/2010: “Real Estate Division dispute highlights differences in governance.”) This kind of information reinforced our conviction that we didn’t need to sue Todd – that it was a witch hunt originated by Erin Toll, and that it would die down. Our biggest failing? We were optimists…
A series of negative articles about Erin Toll ensued, with startling quotes such as this: "She was an unguided missile that always sought the headline." Former Gov. Bill Owens describing Erin Toll, (The Denver Post – see attached .pdf below for the whole series of articles.)
IRS: At the end of March and beginning of April, our partners started to notify us that they, too, had received “Notices of Tax Deficiency” from the IRS -- notices saying they owed a ton in back taxes, due to their deduction for the conservation easement being disallowed, plus penalties (a whopping 40% and interest). All of our donating partners.
STATE: On April 9, 2010, we read that Land Owners United (LOU) had won their Open Records Request in Denver District Court Division 9. “The Colorado Division of Real Estate and the Colorado Board of Real Estate Appraisers unlawfully withheld records and failed to respond to repeated, written requests for public records made by a group of Southeast Colorado property owners in August and September of 2009, a Denver District Court judge recently decided.” http://www.denverrealestatewatch.com/2010/04/09/land-group-wins-court-decision/
I have verified with LOU that this decision was appealed by The Division of Real Estate (Erin Toll), but Land Owners United won again on appeal in August of 2011. Unfortunately, links to that decision have disappeared. If you have a link, please send it to me so I can add it! Thanks.
IRS: On April 12, 2010 A&J wrote a lengthy letter to all our partners detailing the long process of dealing with the IRS in Tax Court, and then added, “This, however is not the end of the controversy. This is actually the beginning.” How’s that for cheerful news from your attorney?
MALPRACTICE: As we were grinding our way through these IRS cases that spring, we began to catch a new scent – that maybe Todd’s work had not been as thorough as it should have been. We began to contemplate the ugly fact that we might have to actually sue Todd and the Major Law Firm.
In May, Stan told A&J to go ahead and file a malpractice suit against Todd and Wishful Thinking, and A&J began corresponding with MLF (remember them?) who represented Todd and Wishful Thinking. Dear Readers, Wishful Thinking and Major Law Firm are two of the biggest law firms in Denver. I can assure you that tangling with them was not on our bucket list of bright and happy things to do. It wasn’t glamorous, it wasn’t fun, and it was definitely the last thing in the world we wanted to do. But there we were, dealing with our new reality.
STATE: And, at the same time, another article came out supporting what we had always known – Erin Toll was a problem. See “The Rise and Fall of Erin Toll: Colorado Regulator with a Tough Reputation” May 7, 2010. “http://www.denverpost.com/2010/05/07/the-rise-and-fall-of-erin-toll-colorado-regulator-with-a-tough-reputation/
In June of 2010, I move from one unsuitable job In Denver to another – a full time position with benefits. We desperately needed the money and with Stan tied up with construction on our house and spending money like crazy, I needed to plug the financial holes. Little did I know I was just throwing myself under the bus as far as more abuse and craziness! The new job was so busy I couldn’t even take potty breaks. More stress – just what I needed.
The day before I was supposed to start the new job, I got stung by a bee at our construction home in Walsenburg just as I was leaving for my drive back to Denver. When I started the new job the next day, I was really sick, and covered with red splotches everywhere. I hauled my brand new coworker (a nurse) into the bathroom with me and pulled down my pants to show her my pink waffled butt. “Honey,” she said, “those are hives – you’re just covered in hives. You better get yourself to the ER right now.” Even my throat and lungs felt furry. I was having an extreme allergic reaction and I probably should have been in the ER, but desperate to keep this new job, I foolishly soldiered through the day. Desperation will cause one to do crazy things.
The new job required me to stay five days a week in Denver, then make a mad three-hour-plus dash on weekends down to the work site where we were building our home south of Walsenburg. The job was extremely stressful, the commute was taxing, and I felt as if everything would fall apart if I blinked.
In addition to all the matters related to the conservation easements, we had a lot of demanding personal stuff going on. We were building our own home, and it was a major project in and of itself. It’s not the subject of this blog, but I hope it helps the reader appreciate that in addition to all this C.E. stuff, we had personal lives that frequently felt like they were falling apart due to the impact on our time. Not to mention that this onslaught had already been a long, tough slog. My nerves were getting frazzled, I was beginning to have chest pains, panic attacks, physical issues -- I was just plain miserable. ©Sharon Cairns Mann
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