TCS Annual Owner Certification and IRS Reporting 2 — Questions and Answers
Question 1: What is the minimum correction period that state housing agencies must provide to LIHTC owners after discovering noncompliance?
- 30 days
- 45 days
- 60 days (Correct answer)
- 90 days
Correct answer: 60 days
IRS regulations under Treas. Reg. 1.42-5 require state agencies to provide building owners at least a 60-day correction period after discovering noncompliance.
Question 2: State housing agencies may extend the noncompliance correction period for a maximum total of how long?
- 60 days
- 90 days
- 4 months
- 6 months (Correct answer)
Correct answer: 6 months
While the minimum correction period is 60 days, state agencies have discretion to extend the total correction period up to 6 months.
Question 3: After a correction period expires without the noncompliance being corrected, within how many days must the state agency file Form 8823 with the IRS?
- 14 days
- 30 days
- 45 days (Correct answer)
- 60 days
Correct answer: 45 days
Once the correction period ends without the noncompliance being corrected, the state agency must file Form 8823 with the IRS within 45 days.
Question 4: Annual owner certifications for LIHTC properties verify compliance for which time period?
- The preceding calendar year (Correct answer)
- The current calendar year
- The coming calendar year
- The trailing three years
Correct answer: The preceding calendar year
Annual owner certifications are required to verify that the property remained in compliance throughout the preceding calendar year.
Question 5: Which of the following would NOT typically be required as part of an annual LIHTC owner certification?
- Certification that qualifying rents were charged
- Certification that tenant incomes were verified
- Disclosure of individual tenant Social Security numbers (Correct answer)
- Certification of any noncompliance events that occurred
Correct answer: Disclosure of individual tenant Social Security numbers
Annual owner certifications confirm income and rent compliance and report noncompliance events, but do not require disclosure of individual tenant Social Security numbers to the state agency.
Question 6: Under Treasury Regulation 1.42-5, which party bears primary responsibility for compliance monitoring of LIHTC properties?
- The IRS directly
- HUD
- The state housing credit agency (Correct answer)
- The local building authority
Correct answer: The state housing credit agency
Treasury Regulation 1.42-5 places the responsibility for compliance monitoring, including annual certifications and inspections, on the state housing credit agency.
Question 7: What action must a property owner take upon discovering a noncompliance event before the state agency identifies it during monitoring?
- Correct it without notifying the state agency if done within 30 days
- Self-report it to the state housing credit agency (Correct answer)
- File Form 8823 directly with the IRS
- Wait for the next scheduled state inspection to disclose it
Correct answer: Self-report it to the state housing credit agency
Property owners who discover noncompliance are required to self-report the issue to their state housing credit agency, which then manages the correction period and IRS reporting process.
TCS Annual Owner Certification and IRS Reporting 2
What is the minimum correction period that state housing agencies must provide to LIHTC owners after discovering noncompliance?