COLUMBIA - State and federal tax officials are investigating whether S.C. landowners are getting inflated tax breaks for agreeing not to develop property.

A conservation easement is a legal agreement that allows land owners to deduct the developed value of the land from their taxes. In exchange, they agree to permanently cede development rights to a nonprofit group that monitors the land and ensures it is not developed.

The S.C. Department of Revenue and the Internal Revenue Service will audit easements this tax year after Congress raised questions about the practice last year.

Neither agency said it knew how widespread illegal or fraudulent claims might be in South Carolina.

But Burnie Maybank, director of the S.C. Department of Revenue, said he thinks some S.C. developers are writing off swamp and marsh where homes could never be built or claiming land values equivalent to those of the nation's best real estate.

The department recently completed an audit of 51 conservation easements, a total of 32,000 acres, donated over a three-year period.

It found that property owners had estimated a value of $255 million on donated land though not all of that value was claimed on tax returns.

By comparison, the state collected about $420 million in corporate taxes in that period.

"We were shocked by the amount of money" involved, Maybank said.

Maybank thinks the problem is increasing. He cited a growing number of sham nonprofits set up by developers to accept easements. A nonprofit has to agree to accept an easement before a tax credit can be claimed.

An N.C. company on its Web site urges golf courses to secure easements on their fairways, which Ann Jennings with South Carolina's Congaree Land Trust said is an example of an easement that does not conserve land for the public.

Fraud is a problem, preservationists said.

"The government is cracking down, and they should," said Yancey McLeod, an environmental consultant who lives in Richland County and does conservation work across the country.

"There have been some abuses," McLeod said.

Supporters say easements help protect streams, forests and wetland while another use allows families to reduce estate taxes and keep large parcels of land within a family - though development will be limited.

Conservation easements were first approved by Congress in 1980 as a way to encourage preservation of environmentally important land.

In exchange for giving up development rights, the property owner can claim the land's developed value, minus the remaining land value, as an income tax deduction.

Those deductions can add up, and experts said conservation easements are becoming more popular as people become more familiar with the law.

"The easement business is booming," said Ken Driggers, who helps write conservation easements.

Driggers also is executive director of the Palmetto Conservation Foundation.

"Ninety-nine and nine-tenths of all easements are good conservation projects and above-board," he said.