How to Document Outside Guidance for Consistent Management Decisions

If you’re like most tax credit managers, you probably contact an outside party such as your state housing agency or a tax credit consultant to get guidance when you’re not sure how to handle certain day-to-day management issues. When you get this guidance, it’s a good idea to document what you’ve been told in writing, preferably on a form for that purpose so you don’t omit any key information.

Putting guidance in writing will help you and other staff members at your site to follow it correctly and consistently. It also may help you avoid liability if your reliance on an outside party’s guidance causes your site to fall into noncompliance or creates other problems. You and other staff members can show that you’re acting based on an outside party’s guidance and have a record of where and how your site got that guidance. To help you document guidance you get from outside parties, we’ll give you a Model Guidance Documentation Form.

How Form Helps

Using our form can help you in two ways.

Educate staff members and get them to follow guidance. Putting guidance from outside parties in writing should help you accurately explain it to other staff members. And if issues arise later, staff members can check the forms to see exactly what the guidance was. This will help ensure that all staff members understand and consistently follow any guidance your site gets from outside parties.

Avoid liability and explain actions. Documenting guidance from outside parties helps you and other staff members to explain or defend your actions if that later becomes necessary. You don’t have to rely on an outside party’s memory of a telephone conversation you had months ago. Plus, the site staff member who’s asked to explain your staff’s actions may not be the staff member who actually spoke with the outside party to get the guidance.

For instance, say that during an audit, your state housing agency objects to your use of a certain clause you’ve been including in your leases with low-income households. But you have a form that shows auditors that you contacted the agency before adding the clause to your leases to confirm that using it was okay. Even if your agency requires you to stop using that clause, having evidence that you used the clause with the agency’s permission will help you avoid any liability for having used it. It will also show your agency that you have a cooperative attitude and take extra steps to ensure that your site stays in compliance with the tax credit program.

You should promptly complete a form each time you get guidance from an outside party, whether or not you requested the guidance. Then, after communicating the guidance to the appropriate staff members, file your completed form in a readily accessible folder. This way, you and other staff members can easily check the forms if questions later arise about the issues they cover.

How to Complete Form

Here’s how to complete the form:

Explain issue. Start by writing a brief explanation of the issue for which guidance was given.

Outline guidance. Explain the guidance you got from the outside party. If you need more room, continue your explanation on the back of the form.

Identify outside party. Check the box to indicate which outside party gave you the guidance. Our form lists the most common parties tax credit sites contact for guidance: the IRS, the state housing agency, the site’s owner, the site’s attorney, the site’s accountant, a tax credit consultant, and a fair housing consultant. For other outside parties, simply check “Other” and identify the party. Also, write the name and title of the individual who gave you the guidance. For instance, if you contacted your state housing agency, write “Mary Smith, tax credit compliance officer.”

Give date and means of guidance. Say how the outside party gave you the guidance (for example, by phone) and when it did so.

Say if additional documentation is attached. Check the box to indicate if you’ve attached any related documentation to the completed form. For instance, if you emailed someone at the agency for help on an issue and she replied with guidance, print a copy of the emails and attach them to the form. Or if the owner of your site got a private letter ruling on a key management issue from the IRS, attach a copy.

Give date and your name. Write the date you complete the form. This way, anyone who looks at the form can see that you completed it promptly after getting the outside guidance. And sign your name in case anyone consulting the form has follow-up questions.