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Learning The Basics Housing Tax Credit 101 March 5-6, 2009 The Blackstone Hotel Chicago, IL Susan Pristo Reaman.

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Presentation on theme: "Learning The Basics Housing Tax Credit 101 March 5-6, 2009 The Blackstone Hotel Chicago, IL Susan Pristo Reaman."— Presentation transcript:

1 Learning The Basics Housing Tax Credit 101 March 5-6, 2009 The Blackstone Hotel Chicago, IL Susan Pristo Reaman

2 IRS Oversight and Guidance Under LIHTC Program IRS Small Business/Self-Employed Division Examination Division –Oversees compliance of housing credit program and enforcement of IRC § 42 –Works with State Housing Agencies in the administration and monitoring of housing projects under the LIHTC program. –Selects projects for audit

3 IRS Oversight and Guidance Under LIHTC Program (contd) Office of Chief Counsel IRS, National Office Washington, DC –Associate Chief Counsel, Pass-throughs and Special Industries, Branch 5 Issues Guidance for LIHTC through: –Private Letter Rulings –Revenue Rulings –Revenue Procedures –Income Tax Regulations –Notices

4 IRS Oversight and Guidance Under LIHTC Program (contd) Provide Legal Advice to IRS Examination Division –Technical Advice Memorandum –Chief Counsel Advice –Informal Advice

5 IRS Oversight and Guidance Under LIHTC Program (contd) Department of Treasury Office of Tax Policy –Works with Congress to develop and draft Tax Legislation. –Implements Executive Branch policy including policy under the LIHTC program –Works with IRS Office of Chief Counsel to interpret, draft, and review all published guidance including: Revenue Rulings Income Tax Regulations Notices

6 IRS Oversight and Guidance Under LIHTC Program (contd) Office of Tax Policy and IRS Guidance Priority List –Agreement between Treasury Department, IRS Commissioner, and IRS Chief Counsel to issue priority guidance within the Business Plan year which runs from July 1 to June 30 Based upon new laws and requests from IRS and Taxpayers on issues needing published IRS Guidance. See, Notice , IRB 869 Plan is periodically updated Current LIHTC listed items: –Relief from certain § 42 LIHTC requirements due to severe storms and flooding in Missouri (Published 7/16/2008 IRB Notice –Final regulations on the requirements for a qualified contract –Guidance under § 42

7 IRS Oversight and Guidance Under LIHTC Program (contd) Private Letter Ruling (PLR) Process –A private letter ruling is a ruling on a particular taxpayers proposed transaction May not be used as precedent Taxpayer must follow PLR procedures under Revenue Procedure , IRB 1.

8 IRS Oversight and Guidance Under LIHTC Program (contd) Income Tax Regulations Process –Regulations may arise from: New legislation IRS or taxpayers request for guidance on a particular tax issue Regulation is drafted by IRS Chief Counsel Attorneys Reviewed by Treasury Attorneys Proposed Regulation is published and provides for comment period and public hearing After review of comments, final regulations are published

9 IRS Oversight and Guidance Under LIHTC Program (contd) Audits of LIHTC Properties –IRS has internal process for audit selection –Issuance of Form 8823 – Low-Income Housing Credit Agencies Report of Non-Compliance or Building Disposition may result in an audit of low-income housing project –Legal issues that may arise in the course of an audit may be resolved through a request for Technical Advice from IRS Chief Counsel –Requests for Technical Advice procedures are found in Revenue Procedure , IRB 87

10 IRS Oversight and Guidance Under LIHTC Program (contd) Audit Process –An Examination audit finding of tax deficiency may be appealed –Taxpayer works with Appeals Officer for settlement –Taxpayer that does not agree with Appeals Officer may file petition in Tax Court without paying tax deficiency (interest runs on unpaid tax deficiency) –Taxpayer that pays tax deficiency may file claim for refund in District Court

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