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President Biden recently unveiled a sweeping plan that aims to create and preserve hundreds of thousands of affordable housing units in the next three years and help close the country’s critical housing supply shortfall within five years. The plan follows recent remarks by President Biden saying that tackling inflation is his top economic priority, noting that housing prices are a key driver of inflation. Administration officials said the plan will help "ease the burden of housing costs over time."
LIHTC site owners and managers know that to comply with the vacant unit rule, you must make “reasonable attempts” to rent vacant units to qualified low-income households. The tax credit program’s vacant unit rule allows you to claim credits for tax credit units even if they’re unoccupied. The IRS permits an owner to continue claiming credits for a vacant unit as long as management makes reasonable efforts to rent the vacant unit (or another unit of comparable or smaller size) to a qualified low-income household [IRC §42(g)(1); §42(c)(1)(B)].
On March 16, President Biden signed into law the latest reauthorization of the Violence Against Women Act (VAWA), a 1994 law that provides resources for survivors and prevention of gender-based, domestic, and sexual violence. VAWA’s renewal took on added urgency because of an alarming spike in domestic violence that coincided with the coronavirus pandemic. According to experts, domestic violence often increases during periods when families spend more sustained time together. VAWA was reauthorized as part of the 2022 Consolidated Appropriations Act.
The Treasury Inspector General for Tax Administration (TIGTA) recently released a report on IRS oversight of the LIHTC program. The previous Chairman of the Senate Budget Committee, Michael Enzi (R-WY), requested the audit to obtain information about the LIHTC program as part of the committee’s evaluation of the economy, efficiency, and effectiveness of federal housing assistance programs.
On Jan. 11, the IRS issued guidance extending LIHTC program deadlines and providing other compliance accommodations due to the COVID-19 pandemic [IRS Notice 2022-05]. Since the last extension deadline lapsed, industry groups have asked the IRS to extend compliance deadlines for LIHTC sites. The groups pointed to surging COVID-19 cases nationally to justify another extension.
The alarming rise of the Omicron variant may have postponed your site’s return to normal operations regarding welcoming and informing new households of site rules and certain obligations imposed by the tax credit program. In pre-pandemic times, sites may have held new household orientation meetings. These individual or group sessions would’ve allowed staff to communicate clearly what’s expected of residents.
Site owners, at least annually, for each year of a site's 15-year compliance period, are required to certify to the state housing agency that the LIHTC site was operated in compliance, for the preceding 12-month period, with Internal Revenue Code (IRC) Section 42 requirements. This annual owner certification is a requirement of Treasury Regulations 1.42-5 paragraph (c)(1).
As the temperature starts dropping across the country, your site may be undertaking increased pest prevention treatments or inspections as pests, particularly rodents, start moving indoors. Unfortunately, some residents are not always diligent about reporting pest issues for reasons such as concerns about cost or lease violations.
If you manage a mixed-income site, you’re probably gearing up to kickstart annual recertifications as a result of the expiration of IRS Notice 2021-12. This notice temporarily postponed the income recertification requirement for owners until Sept. 30.
In January, the IRS issued Notice 2021-12, which temporarily postponed a number of compliance deadlines for LIHTC sites. The extension deadline is coming up and owners and managers need to be mindful of how this will affect site operations as sites transition to pre-pandemic compliance requirements.
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