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Quick Tips | IRS LIHTC Technical Guides - 8823 Guide and Sect 42 ATG

compliance monitoring lihtc Feb 14, 2024

Facts | What standards does the IRS expect state LIHTC agencies and IRS auditors to use when reviewing a property for compliance? What will risk credits and what will not? The IRS has published two super-useful Guides that give us insight into what to expect when state agencies and the IRS audit a property. Although these Guides are not legal authority or tax code, they do provide the IRS' instructions to auditors and also extensively cite references that are legal tax code and other authorities, and thus form a reliable basis for examining LIHTC compliance with Section 42 as states and the IRS will.

Implication | These Guides not only help us to prepare for inspection, but they also help us understand how to fix any noncompliance found. They also help clarify some matters that auditors sometimes cite incorrectly. These Guides arm us with very powerful tools to succeed in accurately reading the facts and protecting the LIHTC allocation for a property.  

Resource | The Guides can be found HERE.

Note | When at the above link, the 8823 Guide is under the header "Low-Income Housing Credit - Guide for Completing Form 8823" and the Section 42 ATG is labeled "IRC §42, Low-Income Housing Credit". This text also provides direct links. 

Bonus | Check out Exhibit B of the Section 42 ATG for a very extensive list of federal references applicable to the LIHTC program and a summary of the content of each. This is very helpful as a resource for relevant information on a wide variety of topics. 

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