The Internal Revenue Service (IRS) recently released notice REG-136491-09 which proposes to amend LIHTC utility allowance regulations. The IRS proposal indicates that if the cost of a particular utility for a residential unit is paid pursuant to an actual-consumption submetering arrangement, then that cost is treated as being paid directly by the tenant and not by or through the owner of the building. The IRS also defines actual-consumption submetering arrangements and indicates that if the owner charges a unit’s tenants an administrative fee for the owner’s actual monthly costs of administering an actual-consumption submetering arrangement, then the fee is not considered gross rent. Use of a ratio utility billing system (RUBS) would still be disallowed.
The notice includes information about a public hearing to be held on Tuesday, November 27, 2012, at 10 am at the Internal Revenue building and outlines topics. The IRS is accepting comments on this proposal until October 6, 2012.
Click here to read REG-136491-09.
