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Taxpayer Removal from the Program – The Section 42 Death Penalty

October 4, 2015

Taxpayer Removal from the Program – The Section 42 Death Penalty IRS Treasury Regulation §1.42-5(e)(3) provides authority for the state agency to report to the IRS that a building is “no longer in compliance nor participating in the IRC…

Allocations Under the Nonprofit Set-Aside – IRS Requirements

September 28, 2015

A. J. Johnson

IRC Section 42(h)(5) requires that a portion of each states annual credit ceiling be set aside for allocation to projects involving qualified nonprofit organizations. Specifically, the Code requires that not more than 90% of the state housing credit ceiling for…

Children For Whom Custody is Being Sought – To Count or Not to Count

September 21, 2015

A. J. Johnson

Children for Whom Custody is Being Obtained – To Count or Not to Count When determining income eligibility for Section 8 or Low-Income Housing Tax Credit (LIHTC) properties, HUD Section 8 rules must be followed. The basic HUD guidance…

The IRS and Extended Use Agreements

September 20, 2015

A. J. Johnson

The IRS and Extended Use Agreements As outlined in §42 (h) (6), all LIHTC properties allocated credits after 1989 must have an extended use agreement (EUA). The agreement is entered into by the taxpayer and the Housing Credit Agency…

Definition of a Parent for the Section 42 Student Rule

September 16, 2015

A. J. Johnson

Section 42 (i) (3) (D) states that certain students do not disqualify a unit from being low-income for LIHTC purposes. Five exceptions are outlined in the Code, one of which states “A unit shall not fail to be treated as…

Determining the Cash Value of and Income from Annuities

September 8, 2015

A. J. Johnson

Determining the Cash Value of and Income from Annuities There is some confusion among managers of affordable rental housing regarding how to determine the value of and income from annuities. Part of the confusion is the result of a…

Claiming Credits without an IRS Form 8609 – Guidance from the IRS Audit Guide

September 6, 2015

A. J. Johnson

Claiming Credits without an IRS Form 8609 – Guidance from the Audit Guide IRC §42(l)(1) requires that taxpayers complete a certification with respect to the first year of the credit period. This certification is made by completing Part II…

Section 42 Audit Guide- Techniques Used During Audit

September 2, 2015

A. J. Johnson

Audit Guide Chapter 3- Techniques Used During Audit The IRS audit process includes the accumulation of evidence for evaluating the accuracy of a taxpayer’s tax return. Evidence includes taxpayer testimony, books and records, examiner observations, and third party documents.…

The IRS Section 42 Audit Guide: How Tax Returns for LIHTC Properties are Analyzed for Audit Potential

August 23, 2015

A. J. Johnson

How Tax Returns for LIHTC Properties are Analyzed for Audit Potential The IRS §42 Audit Guide provides guidance for analyzing tax returns before contacting taxpayers to determine the specific tax credit issues that should be audited. Prior to any…

Role of the IRS and State Agencies in Implementing the LIHTC Program

August 16, 2015

A. J. Johnson

With the revision of the IRS Audit Guide for the Low-Income Housing Tax Credit Program, the IRS is providing a comprehensive examination of the requirements of the program. Chapter 1 of the Guide provides and introduction and overview of the…

IRS Publishes Revised LIHTC Audit Guide – August 11, 2015

August 9, 2015

A. J. Johnson

The IRS has published a revised Audit Guide for the Low-Income Housing Tax Credit Program, with a revision date of August 11, 2015. The Guide is intended to assist IRS examiners when auditing Partnerships that utilize the Federal Low-Income Housing…

GAO Recommends Joint HUD – IRS Oversight of LIHTC Program

August 2, 2015

A. J. Johnson

Responding to a request from Senator Charles Grassley, Chairman of the Senate Judiciary Committee, the Government Accountability Office (GAO) as performed a review of the oversight and administration of the Low-Income Housing Tax Credit (LIHTC) Program. The results of the…

RAD – Revised Program Notice PIH-2012-32, REV-2

July 6, 2015

A. J. Johnson

On June 26, 2015, HUD published a Notice in the Federal Register revising some of the rules of the Rental Assistance Demonstration (RAD) Program. HUD’s original notice on the program was published on June 26, 2012. The RAD program provides…

Nonprofit Material Participation Requirements

June 6, 2015

A. J. Johnson

Section 42 (h) (5) of the Internal Revenue Code requires that Housing Finance Agencies set aside at least ten percent of their annual allocation for use by non-profit entities. This “non-profit pool” is available only to Qualified Nonprofit Organizations and…

Good Cause Evictions – New IRS Guidance

May 26, 2015

A. J. Johnson

The IRS issued a Chief Counsel Advice (CCA) memorandum on March 26, 2015 on the subject of Noncompliance Resulting from Conflicting Program Requirements in the Low-Income Housing Tax Credit program. The memorandum was issued in order to change the advice…

Verification of Social Security and Supplemental Security (SSI) Payments

April 11, 2015

A. J. Johnson

Verification of Social Security and Supplemental Security Income (SSI) Payments Managers of affordable housing properties (e.g., Section 8, LIHTC, Section 515, etc.) often struggle with the verification of income from Social Security (SS) or SSI. While verification of such…

HUD to Publish Proposed VAWA Regulation

March 30, 2015

A. J. Johnson

HUD Secretary Julian Castro announced on March 25, 2015 that HUD’s proposed regulation implementing the Violence Against Women Act of 2013 (VAWA 2013) will shortly be published in the Federal Register. The rule will implement the VAWA 2013, which expands…

Understanding Military Income and Allowances

March 28, 2015

A. J. Johnson

I get many questions from managers regarding how to deal with and verify income for members of the military. Understanding the military pay system is confusing even for those in the military; it can be impossible for persons not familiar…

Employee Unit Rent

March 22, 2015

A. J. Johnson

As I indicated in a memo I sent to clients on November 7, 2014, the IRS will not consider the charging of rent or utilities for employee or security officer units to be an audit issue. This position is stated…

2015 Income Limits

March 7, 2015

A. J. Johnson

On March 6, 2015, HUD published the 2014 income limits for HUD programs as well as for the Low-Income Housing Tax Credit and Tax-Exempt Bond programs. The limits for the LIHTC and Bond projects are published separately from the limits…

Poverty Guidelines Published by HHS – Income Limits to Follow

January 31, 2015

A. J. Johnson

On January 22, 2015, the U.S. Department of Health & Human Services published the 2015 Poverty Guidelines in the Federal Register. These guidelines are used to determine financial eligibility for certain federal programs, including HUD Subsidized housing programs. HUD had…

E-Book on LIHTC Compliance Now Available

January 22, 2015

A. J. Johnson

As you well know, the federal low-income housing tax credit program is complicated. Staying in compliance with all of the program’s rules – and successfully interpreting the gray areas – is essential for all of the players involved in projects:…

HUD Memo Regarding Occupancy Protections for Residents in LIHTC Projects

January 20, 2015

A. J. Johnson

HUD Memo Regarding Occupancy Protections for Residents in LIHTC Projects On January 12, 2015, HUD sent a memorandum to HUD offices and contract administrators providing guidance on protection of tenants of HUD projects when Low-Income Housing Tax Credits (LIHTC)…

Documents to Retain for LIHTC Projects

January 16, 2015

A. J. Johnson

Documents to Retain for Low-Income Housing Tax Credit Projects In September 2014, the IRS published the Audit Guide for Low-Income Housing Tax Credit Projects. This guide is intended to assist IRS agents during an examination of a Section 42…

Obtaining Approval for Security Officers at LIHTC Projects

December 7, 2014

A. J. Johnson

If a multifamily project with Low-Income Housing Tax Credits (LIHTC) is experiencing issues with crime or security or is located in a high crime area, owners may want to house a security or police officer in one of the low-income…

Disaster Relief Rules – IRS Revenue Notice 2014-49

November 24, 2014

A. J. Johnson

Disaster Relief Rules Revenue Procedure 2014-49 This IRS Revenue Procedure provides temporary relief from certain requirements of §42 of the Internal Revenue Code (the LIHTC Program) for Agencies and owners if certain areas have been impacted by a major…

Employee and Security Units – IRS Audit Guide (October 2014)

November 7, 2014

A. J. Johnson

The recently released final Section 42 Audit Guide provides some interesting guidance relative to the treatment of employee and security units in a LIHTC project. The Guide confirms that the cost of such a unit is includable in eligible basis,…

Imputed Rate for Assets Change – Effective February 1, 2015

November 7, 2014

A. J. Johnson

HUD issued Notice H 2014-15 on October 31, 2014 changing the imputed rate for assets from 2% to .06%. Beginning on February 1, 2015, HUD will annually publish the passbook savings rate (i.e., imputed rate) to be used for…

Citi Bank Loan Program

October 27, 2014

A. J. Johnson

Developers looking to put together LIHTC deals in California, New York, Illinois, Massachusetts, Delaware, Washington DC, and Florida have a new financing option available to them. Citi Bank has released guidance for its new affordable rental-housing program – The…

Social Security COLA Announced

October 22, 2014

A. J. Johnson

The federal government announced on October 22, 2014 that the Social Security Cost of Live Adjustment (COLA) for 2015 will be 1.7%. This will increase the monthly pension for the average retired worker by $22 per month. This is up from…

Tax Credit

Taxpayer Removal from the Program – The Section 42 Death Penalty

Allocations Under the Nonprofit Set-Aside – IRS Requirements

Children For Whom Custody is Being Sought – To Count or Not to Count

The IRS and Extended Use Agreements

Definition of a Parent for the Section 42 Student Rule

Determining the Cash Value of and Income from Annuities

Claiming Credits without an IRS Form 8609 – Guidance from the IRS Audit Guide

Section 42 Audit Guide- Techniques Used During Audit

The IRS Section 42 Audit Guide: How Tax Returns for LIHTC Properties are Analyzed for Audit Potential

Role of the IRS and State Agencies in Implementing the LIHTC Program

IRS Publishes Revised LIHTC Audit Guide – August 11, 2015

GAO Recommends Joint HUD – IRS Oversight of LIHTC Program

RAD – Revised Program Notice PIH-2012-32, REV-2

Nonprofit Material Participation Requirements

Good Cause Evictions – New IRS Guidance

Verification of Social Security and Supplemental Security (SSI) Payments

HUD to Publish Proposed VAWA Regulation

Understanding Military Income and Allowances

Employee Unit Rent

2015 Income Limits

Poverty Guidelines Published by HHS – Income Limits to Follow

E-Book on LIHTC Compliance Now Available

HUD Memo Regarding Occupancy Protections for Residents in LIHTC Projects

Documents to Retain for LIHTC Projects

Obtaining Approval for Security Officers at LIHTC Projects

Disaster Relief Rules – IRS Revenue Notice 2014-49

Employee and Security Units – IRS Audit Guide (October 2014)

Imputed Rate for Assets Change – Effective February 1, 2015

Citi Bank Loan Program

Social Security COLA Announced

Online Training

Guidance

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