Form 8823: Low-Income Housing Credit Compliance
Form 8823, also known as the Low-Income Housing Credit Agencies Report of Noncompliance, is a crucial document used by affordable housing projects to report any noncompliance issues to the Internal Revenue Service (IRS). The primary purpose of Form 8823 is to ensure that properties receiving Low-Income Housing Tax Credits (LIHTC) are meeting the applicable requirements and serving the intended low-income population.
Key Features and Components
Form 8823 typically includes details on the specific noncompliance issues identified, actions taken to address them, and any follow-up measures planned to resolve the issues. It serves as a means for LIHTC agencies to communicate effectively with the IRS regarding the status of compliance within their projects.
Filing and Compliance Requirements
Affordable housing projects claiming LIHTC must file Form 8823 when noncompliance issues are identified during the compliance monitoring process. The form must be submitted to the appropriate State LIHTC agency and the IRS to report and address these issues promptly.
Penalties for Non-Compliance
Failure to address noncompliance issues and submit Form 8823 as required can lead to significant penalties for affordable housing projects. These penalties may include the loss of tax credits, recapture of previously claimed credits, or other financial repercussions.
Importance in Tax Resolution
Form 8823 plays a critical role in ensuring the integrity of the low-income housing credit program by holding projects accountable for meeting the compliance requirements. Compliance with Form 8823 requirements is essential for maintaining the eligibility of affordable housing properties for LIHTC and contributing to the provision of affordable housing options for low-income individuals and families.