Tax news May 18: IRS offers settlement for conservation easements, Trump Accounts enrollments near 4 million

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• 🔥 Quick Facts
• Conservation Easement Settlement Ends Years of Litigation Standoff
• Why the IRS Is Pushing Hard for Settlements Now
• Settlement Terms and Tax Implications
• Trump Accounts Reach 4 Million Enrollments, Breaking Records
• What Makes This Wealth-Building Program Gain Traction?
• How Will These Tax Changes Affect American Families in 2026 and Beyond?
  • Sources

Tax moves announced this week could reshape filings for millions. The IRS just unveiled a major conservation easement settlement option affecting over 1,100 cases, while enrollment in Trump Accounts has already hit 4 million children. Here’s what every American taxpayer should know.

Conservation Easement Settlement Ends Years of Litigation Standoff

The IRS and Treasury Department just released a breakthrough offer for conservation easement disputes. Frank Bisignano, the IRS CEO, emphasized that genuine preservation matters, not tax shelters. The new initiative targets over 1,100 pending cases divided between Tax Court and IRS Exam.

What makes this different? Under prior settlement attempts since 2020, only 32% of offers were accepted. Taxpayers faced upfront penalties and couldn’t claim charitable deductions. This time, nearly 450 cases won’t need immediate payment, with liability deferred as post-settlement collection. Additionally, 500 cases with expired offers get renewed chances, and 175 cases that never participated before can now settle.

Why the IRS Is Pushing Hard for Settlements Now

Courts have devastated conservation easement claims. Tax Court has only allowed approximately 6% of original claimed deductions while imposing 40% gross valuation misstatement penalties on average. The government has won every major recent case. Kenneth Kies, Acting IRS Chief Counsel, warned taxpayers to carefully review litigation risks and the government’s consistent court victories. The settlement penalties of 10% to 20% represent a massive discount compared to typical courtroom outcomes.

Settlement Terms and Tax Implications

Settlement Feature	90-Day Initial Period	45-Day Extended Period
Charitable Deduction	Not allowed	Not allowed
Out-of-Pocket Deduction	Allowed (cash contributed)	Allowed (cash contributed)
Penalty Rate	10% gross valuation	20% gross valuation
Upfront Payment	Not required	Not required

Eligible partnerships will receive individualized letters on a rolling basis from the IRS detailing their specific settlement terms. The 90-day clock starts from the letter’s postmark or electronic transmission date. Extensions are not available. After 135 total days, only court-based hazards-of-litigation settlements apply, typically allowing 5% to 7% of claimed deductions with standard 40% penalties.

Trump Accounts Reach 4 Million Enrollments, Breaking Records

Meanwhile, the Trump Accounts program is surpassing expectations. Since the One Big Beautiful Bill enacted on July 4, 2025, over 4 million children have been enrolled through Form 4547 submissions. The IRS confirmed that 1+ million of those children are already covered by elections for the $1,000 pilot program contribution. Parents and guardians can elect these accounts simply by checking a box when filing their 2025 tax returns.

What Makes This Wealth-Building Program Gain Traction?

The Trump Accounts offer tax-deferred growth for minors born between January 1, 2025, and December 31, 2028. Unlike education savings plans like 529 accounts, these funds can be used for any purpose. The federal seed contribution of $1,000 deposits directly into eligible children’s accounts. Additional contributions from parents, relatives, employers, and philanthropic organizations become available starting July 4, 2026. IRS CEO Frank Bisignano praised the simple one-page election process that families can complete when filing taxes.

Adoption rates show strong confidence in the program’s design and tax benefits. The fact that 4 million families have already enrolled children suggests widespread interest in building early wealth for the next generation. This represents approximately one-quarter of all children eligible for the program during its early phase.

How Will These Tax Changes Affect American Families in 2026 and Beyond?

Two distinct tax groups face different outlooks. Families with conservation easement investments now have 135 days to make critical settlement decisions that could save substantial tax dollars compared to litigation. Meanwhile, families pursuing wealth-building strategies for children have a new tool offering tax-deferred growth with government seed funding. Both developments reflect significant IRS initiatives aimed at modernizing tax law compliance and encouraging nationwide participation in government programs. The key for taxpayers is acting quickly on conservation settlement letters while registering eligible children for Trump Accounts before contribution deadlines arrive.

Sources

• Internal Revenue Service – Official announcements on conservation easement settlement terms and Trump Accounts enrollment figures
• IRS Newsroom – Detailed guidance on new settlement opportunities targeting eligible conservation easement disputes
• Treasury Department – Coordination on Trump Accounts program implementation and pilot contribution provisions