IRS Priorities for 2011

The IRS and Treasury Department will give priority to issuing guidance on a number of issues relating to the Low-Income Housing Tax Credit Program in 2011. According to the 2010-2011 priority guidance plan released on December 7, 2010, the IRS will focus on four areas relating to the LIHTC in 2011:

1. Final regulations for qualified contract requirements. The IRS issued proposed regulations in July 2007. The final regulation will clarify purchase price calculations and state Housing Finance Agency obligations when taxpayers request that the HFA find a qualified contract purchaser;

2. Final regulation regarding utility allowances for submetered buildings. In May 2009, the IRS clarified that building owners may establish a utility allowance in submetered, rent-restricted units. A final regulation will codify this and clarify some of the questions that remain on this issue;

3. IRS intends to publish guidance regarding the ten-year placed in service restriction on acquisition credits for federal or state-assisted buildings; and

4. Additional guidance on tax credit recapture as required by §42(j)(6).

We will provide updates as these regulations are finalized by the IRS.