Virginia tax officials, concerned about possible abuse of a program that provides tax relief to people who give land for conservation, are reviewing several land donations -- including two involving Fredericksburg's largest developer and its largest development project.

Officials with the Department of Taxation said income tax credits claimed by individuals and companies for "conservation easements" -- which generally are agreements that limit development -- have skyrocketed in the past year, leading them to investigate whether the appraisals were accurate and the donations legitimate.

The federal government, which offers tax deductions rather than credits for easements, has similar concerns. In June, the Internal Revenue Service announced that it had found many easements with dubious public benefit or overstated values, and said it planned to crack down.

The state's tax credit program, one of nine in the nation, has been in place since 1999. The increase in easements in Virginia began in 2002, soon after the legislature passed a law allowing donors to sell their tax credits for cash, said Robert Schultze, who oversees compliance for the department.

The law was meant to help large landowners, especially farmers, who want to stave off development but don't have enough income to benefit directly from the credit. But wealthier taxpayers also have an incentive to sell, because a taxpayer can claim a maximum of $100,000 in credits in a year.

Since 1999, $91 million in tax credits have been claimed -- most of it in the past year.

"Any time a tax credit gets to be this size, we have to make sure taxpayers aren't getting abused," Schultze said. "We have some properties we are concerned about."

The Fredericksburg area inquiries involve two parcels put into conservation easement by the Silver Cos.: a 132-acre parcel in Fredericksburg on the south side of the Rappahannock River and a 308-acre parcel in Stafford County on the river's north side. The easements were created during the approval process for Celebrate Virginia!, a 2,500-acre mega-project that stretches across the river and includes senior citizen housing, golf courses, retail businesses and a slavery museum.

The developer has said the easements were gifts -- charitable donations for which they were entitled to tax credits of more than $12 million last year. But Silver officials and the conservation groups that control the two parcels said state officials are looking into the appraisals and into whether the easements were part of the deal to seal Celebrate Virginia! Under federal and state law, if the developer gave the parcels to get something in return -- that is, if the donations were not entirely voluntary -- they are no longer considered gifts and don't qualify for the tax breaks.

Schultze would not comment on the Silver easements, noting that tax officials are barred from discussing specific taxpayers.

Some conservation groups have expressed concern that legislators will suspend the tax credit program if they think it is being abused.

Easements are given to governments or nonprofit conservation groups. The landowner still owns the land, but the government or group becomes its guardian and enforces the restrictions on it.

Virginia once had a state tax deduction for people who donated easements, but the state eliminated it in 1999 in favor of the new tax credit in an effort to curb rapid growth. In addition, a few municipalities -- including Virginia Beach and Albemarle and Fauquier counties -- set aside money to buy easements.

The number of easements held by the Virginia Outdoors Foundation, one of the nation's largest holders of conservation land, began to rise dramatically after 1999. In 2002, the group set aside nearly 37,000 acres of land in Virginia -- by far the largest total in the group's 36-year history. The group holds the easement on the 132-acre Silver parcel along the Rappahannock.

Paul Gilbert, president of the Northern Virginia Conservation Trust, which holds the 308-acre Silver easement in Stafford, said his group has seen a "big uptick" in donations because of the law allowing the sale of tax credits, "a fantastic thing from our point of view." But Gilbert said he is glad there is an investigation, noting that "any time you have a tax incentive, there can be abuses."

State Sen. Emmett W. Hanger Jr. (R-Augusta) introduced legislation this year to cap the value of properties eligible for the credit, but it failed.

"We are concerned about . . . multimillion-dollar deals," he said. Hanger added that "there are some large ones that have merit. I can't say it's bad just because it's big."

The smaller Silver easement is controversial because of how Celebrate Virginia! began -- with the Fredericksburg City Council taking the unusual step of rezoning the project site before an application was filed. Some citizens were angry that the developer had not been forced to negotiate for a zone change -- with proffers of public improvements or concessions in the size of the project -- and their displeasure was reflected in the next election.

The company, however, did agree to do certain things for the city, including creating the 132-acre easement along the river. The land, which is mostly in a floodplain and does not have access to major roads or utilities, will be used for recreation.

Paul Elkin, attorney for the developer, and City Attorney James M. Pates said that because Fredericksburg rezoned the land, the Silver Cos. was not obliged to do anything in exchange and that the land was given as a gift. But some city officials who were involved at the time said the easement was really a quid pro quo.

Leslie Trew, an easement specialist at the Virginia Outdoors Foundation, said that she didn't know at the time what the developer had agreed to do and that she is reviewing the easement.

The second parcel sits between the Rappahannock and a golf course, near several streams. Because state and federal officials believed the project could affect water quality, they required the Silver Cos. to put 303 of the 308 acres into an easement when they approved a permit in 2002, according to both the Department of Environmental Quality and the Army Corps of Engineers.

An appraiser hired by the Silvers estimated the easement's value at $24.1 million, and the company claimed a tax credit of 50 cents on each dollar, or $12 million, according to a letter it sent to potential buyers of those credits.

The developer wouldn't say how much it claimed in tax credits on the Fredericksburg easement. Elkin said the two projects were gifts and called talks with the state "informal."

He also said Virginia was getting a good deal from the program because the state was meeting its goal of conserving land while paying half-price.

"They aren't looking to preserve one- and two-acre parcels." he said. "The larger parcels will carry larger values and that's why the state passed the amendment."