In an earlier action, the First Circuit upheld the Tax Court's partial summary judgment for the IRS which was then affirmed on reconsideration that the taxpayer's contribution of a facade easement did not comply with the enforceability-in-perpetuity requirements of Treas. Reg. Sec. 1.170A-14(g)(6). The cash payments to the charity that accepted the facade easement remained conditional at end of 2003 and, thus, were not deductible. However, cash payments made in 2004 were deductible. The facade easement was not protected in perpetuity because the donee organization was not guaranteed a proportionate share of the proceeds in the event of casualty or condemnation as required by Treas. Reg. Sec. 1.170A-14(g)(6)(ii). An accuracy-related penalty was applicable for the deduction of cash payments in 2003. On appeal, the appellate court vacated the lower court's opinion on the basis that the interpretation of the regulation at issue by the IRS and the Tax Court was unreasonable and inconsistent with Congressional intent. While the lender retained priority to the insurance proceeds, the petitioner had no power to make the lender give up such protections. The tax liens could potentially trump the donee's right to the funds upon extinguishment of the easement and, thus, the regulation's reference to "entitled" cannot be reasonable construed to give the donor an absolute right to any proceeds. The court's opinion, thus called into question Tax Court opinions in Wall v. Comr., T.C. Memo. 2012-169 and 1982 East, LLC v. Comr., T.C. Memo. 2011-84). On further review, the First Circuit held that the Tax Court correctly upheld the IRS imposition of a substantial valuation misstatement penalty for an underpayment of tax as a result of the donated easement. The easement had no value because the façade was already subject to similar restrictions by reason of being in an historic district. Kaufman v. Comr., No. 14-1863, 2015 U.S. App. LEXIS 6830 (1st Cir. Apr. 24, 2015), aff'g., T.C. Memo. 2014-52.