IRS Seeks Comments on LIHTC Form 8823

The IRS, as part of its continuing effort to reduce paperwork, invites the general public and other federal agencies to comment on proposed and continuing information collections, as required by the Paperwork Reduction Act of 1995. Currently, the IRS is soliciting comments concerning Form 8823, Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition.

State and local housing credit agencies are responsible for monitoring tax credit sites for compliance with the requirements of Internal Revenue Code (IRC) Section 42, such as health and safety standards, rent ceilings and income limits, and tenant qualifications. State agencies perform desk audits, inspect housing, and review tenant files. The state agency then provides the owner with a summary report of its findings.

When the state agency discovers noncompliance or becomes aware of a disposition of a building, the agency is required to notify the IRS using Form 8823. And the owner is expected to respond to the state agency within a maximum of 90 days to provide clarification or document that issues of noncompliance have been addressed.

Then, the state agency determines whether the owner was always in compliance, has corrected the noncompliance, or remains out of compliance. The time to correct the noncompliance may be extended up to a total of six months with state agency approval. Regardless of whether the owner remedied the noncompliance or remains out of compliance, a Form 8823 must be filed with the IRS.

Written comments should be received on or before Sept. 15, 2014, to be assured of consideration. And the IRS requests that comments be directed to: R. Joseph Durbala, Internal Revenue Service, room 6129, 1111 Constitution Ave. N.W., Washington, DC 20224.