San Francisco, Calif. (PRWEB) May 10, 2013
Members of the LIHTC Working Group on May 1, 2013 sent a letter to the Internal Revenue Service (IRS) requesting that the agency add several affordable housing-related items to its 2013-2014 Guidance Priority List. The letter asks the IRS to clarify policies related to the low-income housing tax credit (LIHTC), rural housing designations and other topics of concern to the affordable housing industry.
“The LIHTC Working Group welcomes the opportunity to participate in building the priority list for 2013 and 2014. The IRS has a record of working with industry stakeholders to address the affordable housing industry’s most pressing issues. By providing official guidance in these areas, the IRS can help developers comply with the LIHTC program and related programs,” said Stacey Stewart, CPA, a partner in Novogradac & Company LLP’s Dover, Ohio office who leads the LIHTC Working Group’s efforts.
In its letter, the LIHTC Working Group asks the IRS to provide guidance on three unresolved issues. The group’s members suggest the IRS should define a “federally or state assisted” building as it relates to the exception under Internal Revenue Code Section 42(d)(6); provide recapture guidance for properties funded through the Tax Credit Exchange program; and determine how Section 42 guidelines should be applied when they conflict with the other government funding programs.
The Working Group also asked the IRS to provide guidance on how the economic substance doctrine, including 2010 guidance, applies to LIHTC properties and properties that received Section 1602 tax credit exchange funds and whether an affordable housing property in an area that has lost its rural designation is held harmless at the highest national non-metro median income that the property achieved if its income limit was originally determined using the rural properties income requirements.
“Guidance on a few key issues, including the recapture of tax credit exchange program funds and the loss of rural designations, could greatly enhance the affordable housing industry’s ability to produce quality homes for vulnerable populations,” said Michael J. Novogradac, CPA, managing partner in the firm’s San Francisco office and the LIHTC Working Group’s adviser on industry and governmental affairs. “Housing development programs and provisions have expired in the last few years, yet the industry lacks guidance from the IRS on how properties developed under the programs and provisions should be treated. IRS guidance on the treatment of tax credit exchange program properties and properties in areas that previously qualified as rural would provide the industry with piece of mind and enable us to maintain high-quality housing for low- and moderate-income families.”
For details and a copy of the letter, please go to http://www.lihtcworkinggroup.com. The LIHTC Working Group was established by Novogradac & Company LLP in 2008 to provide a platform for LIHTC industry participants to work together to resolve technical and administrative LIHTC program issues. Members meet monthly via conference call to provide input regarding pending action items as agreed to by the members of the group. Comments and suggestions generated during the group discussions are agreed to and submitted in writing directly to Treasury, the Department of Housing and Urban Development and/or various state agencies. For more information, visit http://www.lihtcworkinggroup.com or email firstname.lastname@example.org.
Novogradac & Company LLP was founded in 1989, and has since grown to more than 400 employees and partners in offices in San Francisco and Long Beach, Calif.; the Washington, D.C., Atlanta, Ga., Detroit, Mich., Kansas City, Mo. and Seattle, Wash. metro areas; St. Louis, Mo.; Boston, Mass.; Austin, Texas; Dover, Columbus and Cleveland, Ohio; New York, N.Y. and Portland, Ore. Specialty practice areas include tax, audit and consulting services for tax-credit-assisted multifamily and affordable housing, community revitalization and rehabilitation of historic properties. Other areas of expertise include military base redevelopment, preparation and analysis of market studies and appraisals of multifamily housing investments and renewable energy tax credits.