IRS grants extra time to identify all buildings in a low-income housing project

Plain-English summary

The IRS granted a taxpayer 120 additional days to elect to treat all buildings in a multi-building project as one project for purposes of the low-income housing credit. The taxpayer had unintentionally failed to make the election on the relevant Forms 8609, although its contemporaneous records and filed returns showed that this was its intended treatment. The IRS concluded that the taxpayer acted reasonably and in good faith and that the extension would not prejudice the government. The taxpayer was instructed to file amended Forms 8609 with a copy of the ruling.

Ruling snapshot

• Question: May the taxpayer receive extra time to identify all buildings in the project as part of a single, multiple-building project under section 42(g)(3)(D)?

• Outcome: Approved

• Key authorities: IRC §§ 42(g)(3)(D) and 42(l)(1); Treas. Reg. §§ 1.42-1(h) and 301.9100-1 through 301.9100-3

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 201115008
Third Party Communication: None
Release Date: 4/15/2011
Date of Communication: Not Applicable
Index Number: 42.00-00, 9100.00-00
Person To Contact:
--------------------------------
--------------------, ID No. -------------
------------------------------------------------------------ Telephone Number:

• ---

  
  ------------------------- Refer Reply To:
  -------------------------------------- CC:PSI:B05
  PLR-128937-10
  Date:
  January 03, 2011

LEGEND

Taxpayer = ---------------------------------
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Project = --------------------------------------

Address = -----------------------------------
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Agency = -----------------------------------------------------------------------

Taxpayer = -----------------------------------------

a = ----

b = -------------------

Dear ---------------:

This letter responds to your authorized representative's letter dated b, requesting an extension of time pursuant to § 301.9100-1 of the Procedure and Administration Regulations to elect to identify all of the buildings in Project for which a building identification number (BIN) was assigned as part of a single, multiple-building project under § 42(g)(3)(D) of the Internal Revenue Code on Taxpayer’s IRS Forms 8609, Low- Income Housing Credit Allocation and Certification.

Project is a multi-building project located at Address. According to information submitted, Taxpayer through inadvertence failed to make an effective election for a
PLR-128937-10
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buildings in Project for which Forms 8609 were issued, consistent with Taxpayer's intent to treat these buildings as part of a single, multiple-building project under § 42(g)(3)(D). Taxpayer’s intent is evidenced by the taxpayer's contemporaneous documentation, and Taxpayer’s filed returns are consistent with this intent.

Section 42(g)(3)(D) provides that a project will consist of only one building unless, prior to the end of the first calendar year in the project period, a taxpayer identifies each building that will comprise the project in the form and the manner that the Secretary provides.

Section 42(l)(1) sets forth the certifications with respect to the first year of the credit period regarding any qualified low-income building that a taxpayer must certify to the Secretary (at such time and in such manner as the Secretary prescribes). Section 1.42- 1(h) of the Income Tax Regulations requires that a taxpayer must file a completed IRS Form 8609 with the Service in accordance with the form's instructions. The election under § 42(g)(3)(D) with respect to a building is made on Part II of Form 8609 for the building and requires the inclusion of an accompanying informational statement.

Sections 301.9100-1 through 301-9100-3 provide the standards the Commissioner will use to determine whether to grant an extension of time to make an election.

Section 301.9100-1(b) defines the term “regulatory election” as including an election whose due date is prescribed by a regulation published in the Federal Register, or a revenue ruling, revenue procedure, notice, or announcement published in the Internal Revenue Bulletin.

Under § 301.9100-1(c), the Commissioner has discretion to grant a reasonable extension of time under the rules set forth in §§ 301.9100-2 and 301.9100-3 to make a regulatory election, or a statutory election (but no more than six months except in the case of a taxpayer who is abroad), under all subtitles of the Code, except E, G, H, and I.

Section 301.9100-2 provides automatic extensions of time for making certain elections. Section 301.9100-3 provides extensions of time for making elections that do not meet the requirements of §301.9100-2.

Requests for relief under § 301.9100-3(a) will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good faith, and that granting relief will not prejudice the interests of the government.

In the instant case, based solely on Taxpayer's facts submitted and its representations made, we conclude that the requirements of §§ 301.9100-1 and 301.9100-3 have been met. Accordingly, Taxpayer is granted an extension of time to make the election under
§ 42(g)(3)(D) to treat all a buildings in Project for which Forms 8609 were issued by Agency as part of a single, multiple-building project by filing within 120 days from the
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date of this letter amended Forms 8609 that includes this intended election. The amended Forms 8609 (along with a copy of this letter) are to be filed with the Philadelphia Service Center at the address provided for the Service Center in that form. A copy of this letter is enclosed for this purpose.

No opinion is expressed or implied regarding the application of any other provisions of the Code or regulations. Specifically, we express no opinion on whether the Forms 8609 for the a buildings in Project were timely or correctly filed, the effect of Taxpayer’s election under § 42(g)(3)(D) for any closed year, or whether Project buildings otherwise qualify for low-income housing tax credits under § 42.

This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of the Code provides that it may not be used or cited as precedent.

In accordance with the Power of Attorney on file with this office, a copy of this letter is being sent to your authorized representative.

Sincerely yours,

Christopher J. Wilson

Christopher J. Wilson
Senior Counsel, Branch 5
Office of the Associate Chief Counsel
(Passthroughs & Special Industries)

Enclsoures (2): Copy of this letter Copy for § 6110 purposes