Last week, the IRS released a long-anticipated update to its Audit Technique Guide for the low-income housing tax credit (“LIHTC”) program. The guide is intended to assist IRS examiners charged with auditing owners of LIHTC properties, and is the first official update published since 1999. A draft of the updated guide was made available for public comment from December 2013 through March 2014. The IRS’s notes accompanying the update indicate that 19 groups and individuals provided comments, in addition to comments provided by various IRS personnel.
Among other changes, the updated audit guide:
- expands the definition of “Residential Rental Property” in accordance with Notice 88-91;
- clarifies that a deferred developer fee may be documented by a note or “other applicable documents evidencing the debt”;
- adds new section entitled “Emergency Housing Relief”; and
- expands discussion of “Casualty Losses in Federally Declared Disaster Areas” to include a reference to Revenue Procedure 2014-49.