The Internal Revenue Service intends to review transactions involving improper charitable contribution deductions of conservation easements, and may challenge the tax-exempt status of participating organizations, according to recent announcements by the IRS and Treasury Department. Notice 2004-41 describes transactions taxpayers transfer of an easement on real property to a charitable organization, or make payments to a charitable organization in connection with a purchase of real property from the organization. Claiming an income tax charitable deduction under Internal Revenue Code section 170 for such transfers and payments is often improper, the Notice says, because the donor (or related parties) can reasonably expect to receive economic benefits greater than those received by the general public as a result of the donation.  Thus, the Service will disallow improper deductions and impose penalties on donors and promoters of the transactions. Participating organizations may be operating for a substantial nonexempt purpose or impermissible private benefit, resulting in the charity's loss of its exempt status under Code section 501(c)(3), and possibly intermediate sanctions excise taxes under section 4958.