PLR 1324014: IRS grants more time to elect a multi-building low-income housing project

Plain-English summary

A taxpayer asked the IRS for more time to identify all buildings in a low-income housing project as part of a single, multiple-building project for section 42 purposes. The taxpayer said the election was not made effectively because of inadvertence, even though contemporaneous documents showed the intended treatment. The IRS found that the taxpayer acted reasonably and in good faith and that granting relief would not prejudice the government. It granted 120 days from the letter date to file amended Forms 8609 making the election.

Ruling snapshot

• Question: Could the taxpayer receive an extension to make the section 42(g)(3)(D) multiple-building project election?
• Outcome: Approved
• Key authorities: IRC §§ 42(g)(3)(D), 42(h)(1)(F)(ii), 42(l)(1), and 6110(k)(3); 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: 201324014 Third Party Communication: None
Release Date: 6/14/2013 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-145622-12
Date:
February 11, 2013

LEGEND

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

Project = -----------------------------------------

Address = --------------------------

Agency = -------------------------------------------------------------------------

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 consists of a buildings located at Address. According to information submitted,
Taxpayer through inadvertence failed to make an effective election for all a 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 contemporaneous documentation consistent with this
intent.

PLR-145622-12 2

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 (as defined in § 42(h)(1)(F)(ii)), each building
that will comprise the project is identified in the form and the manner that the Secretary
provides.

Section 42(l)(1) sets forth the certifications for 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 building owner (i.e., taxpayer) must file a completed Form 8609 with the Service
in accordance with the form instructions. The election under § 42(g)(3)(D) for a building is made
on Part II of Form 8609 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 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

PLR-145622-12 3

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

Enclosures (1): Copy of this letter
Copy for § 6110 purposes

cc: