IRS/Tax Issues

The Internal Revenue Service (IRS) issued final regulations regarding the provision of the Tax Cuts and Jobs Act that limits the deduction for business interest expense, including basic statutory amendments made by the CARES Act.

On June 25, 2020 the California Tax Credit Allocation Committee issued a new memo providing additional guidance on the Average Income Test Federal Election.  In May 2018, TCAC adopted regulations that allowed projects with an existing tax credit reservation to elect the Average Income Test and make changes to the application’s housing unit designations, increasing some to 80% AMI.

In response to the ongoing COVID-19 pandemic, the Internal Revenue Service today issued Notice 2020-53 to provide tax relief to issuers, operators, owners, and tenants of qualified low-income housing projects or qualified residential rental projects financed with exempt facility bonds, and state agencies that have jurisdiction over these projects.

The Internal Revenue Service issued a proposed rule on the compliance-monitoring duties of state agencies for purposes of the low-income housing credit. The proposed regulations relax the minimum compliance-monitoring sampling requirement for purposes of physical inspections and low-income certification review, providing flexibility and reduced burdens with respect to the requirements set forth in the final regulations published on February 26, 2019.

The Internal Revenue Service (IRS) released Notice 2020-39, providing guidance for investors in the Opportunity Zones (OZ) incentive in the wake of the COVID-19 pandemic. The guidance provides that taxpayers whose last day of the 180-day period to invest capital gains in a Qualified Opportunity Fund (QOF) falls on or after April 1, 2020, and before December 31, 2020, to postpone the last day to December 31, 2020

The Internal Revenue Service issued Notice 2020-41 to extend the continuity safe harbor for renewable energy production tax credit (PTC) and investment tax credit (ITC) properties that began construction in 2016 or 2017. The notice adds an extra year to the four-year continuity safe harbor in existing guidance, stating that those projects placed in service within five years will be deemed continuous.

In Revenue Procedure 2020-21, the IRS provides temporary guidance to allow hearings held by teleconference due to the COVID-19 pandemic to meet the statutory public approval requirement for PABs. Notice 2020-25 temporarily expands the circumstances and period for which a PAB is treated as “continuing in effect” without requiring the reissuance or retirement.

The National Council of State Housing Agencies (NCSHA) released a matrix comparing the LIHTC accommodations NCSHA is requesting from the IRS to those allowed under existing IRS Revenue Procedures 2014-49 and 2014-50, which provide relief in instances of Presidentially-declared Major Disasters, and to recent IRS Notice 2020-23, which extends certain program deadlines until July 15, […]

The Ohio Housing Finance Agency (OHFA) will grant Carryover Allocation relief to eligible projects on a case-by-case basis. To be eligible, projects must have a demonstrated and documented need and must meet the requirements outlined in Rev. Proc. 2014-49.

The National Council of State Housing Agencies (NCSHA) released a matrix comparing the LIHTC accommodations NCSHA is requesting from the IRS to those allowed under existing IRS Revenue Procedures 2014-49 and 2014-50, which provide relief in instances of Presidentially-declared Major Disasters, and to recent IRS Notice 2020-23, which extends certain program deadlines until July 15, […]

The IRS issued Revenue Procedure 2020-23 that allows, once again, the amending of Bipartisan Budget Agreement (BBA) partnership tax returns once Form 8609 is received for 2018 tax returns, as long as the partnership files an amended return by September 30, 2020.

The Internal Revenue Service issued Notice 2020-23, providing additional relief to taxpayers affected by COVID-19. Among other things, the notice automatically extends the 180-day deadline to invest capital gains in a Qualified Opportunity Fund to July 15 for taxpayers with a deadline between April 1 and July 15. While the notice does not specifically reference any Housing Credit or Housing Bond deadlines, it applies the July 15 deadline to all time-sensitive actions included in IRS Revenue Procedure 2018-58, which includes numerous deadlines related to these programs.