TCS Inspection and Physical Compliance 2

Question 1

Under IRS regulations, what percentage of a project's LIHTC units must be physically inspected by the state agency?

Accepted Answer

At least the greater of 20% or 5 units

Answer

The IRS requires state agencies to inspect the greater of 20% of the project's LIHTC units or 5 units during compliance monitoring reviews.

Question 2

An owner voluntarily discloses a physical deficiency to the state agency before inspection. This is treated as:

Accepted Answer

A self-reported noncompliance event requiring IRS notification

Answer

Voluntarily disclosed physical noncompliance must still be reported to the IRS by the state agency, though good faith may affect how the agency pursues corrective action.

Question 3

Which of the following would constitute a physical noncompliance event under LIHTC rules?

Accepted Answer

A unit with an inoperable heating system during winter months

Answer

An inoperable heating system in winter is an emergency health and safety deficiency that constitutes physical noncompliance and requires immediate remediation.

Question 4

How does the IRS receive notification of physical noncompliance at a LIHTC property?

Accepted Answer

The state housing finance agency files Form 8823 reporting the noncompliance

Answer

State housing finance agencies are required to report noncompliance events to the IRS using Form 8823, Low-Income Housing Credit Agencies Report of Noncompliance.

Question 5

Which form do state agencies use to report noncompliance to the IRS?

Accepted Answer

Form 8823

Answer

Form 8823, Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition, is filed by state agencies to report compliance events to the IRS.

TCS - Tax Credit Specialist Practice Test

TCS - Tax Credit Specialist Practice Test

TCS Inspection and Physical Compliance 2