PLR 1328002: IRS grants extra time to make low-income housing elections

Plain-English summary

The IRS granted a taxpayer 120 days to make intended elections under IRC § 42(g)(1)(B) for a multiple-building low-income housing project. The taxpayer had made incorrect or untimely elections on Forms 8609, and the IRS found the requirements for relief under the section 9100 regulations satisfied. The ruling did not decide whether the buildings otherwise qualified for the low-income housing credit.

Ruling snapshot

• Question: Would the taxpayer receive the requested federal tax treatment on the stated facts?
• Outcome: Approved, subject to the stated facts, representations, and conditions.
• Key authorities: IRC §§ 42, 9100.

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201328002 Third Party Communication: None
Release Date: 7/12/2013 Date of Communication: Not Applicable
Index Number: 9100.01-00
Person To Contact:
---------------------- ----------------------------, ID No. --------------
---------------------------------------- -----------------
---------------------------------------------------- Telephone Number:
-------------------------------------- ---------------------
------------------------------ Refer Reply To:
In Re: CC:PSI:B05
--------------------------------------------------- PLR-103484-13
-------------------------------------- Date:
------------------------------ April 04, 2013

LEGEND

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

BINs = ---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------

Year 1 = ------------------------------------------------------

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

  This letter responds to a letter dated December 31, 2012, and a subsequent

submission on behalf of Taxpayer, requesting an extension of time to make the election
under § 42(g)(1)(B) of the Internal Revenue Code pursuant to § 301.9100-1 of the
Procedure and Administration Regulations.

    According to the information submitted, Taxpayer owns a multiple building

project. The building identification numbers assigned to the project buildings are BINs.
Taxpayer elected on Forms 8609, Low-Income Housing Credit Allocation and
Certification, to begin the credit period for the project buildings in Year 1. Taxpayer
inadvertently failed to make timely, correct elections for the project buildings under
§ 42(g)(1), consistent with Taxpayer’s intent, as evidenced by Taxpayer’s
contemporaneous documentation.

  Section 42(g)(1) defines qualified low-income housing project as any project for

residential rental property if the project meets the requirements of § 42(g)(1)(A) or (B),
whichever is elected by the taxpayer. The project meets the requirements of
PLR-103484-13 2

§ 42(g)(1)(A) if 20 percent or more of the residential units are both rent-restricted and
occupied by individuals whose income is 50 percent or less of area median gross
income. The project meets the requirements of § 42(g)(1)(B) if 40 percent or more of
the residential units are both rent-restricted and occupied by individuals whose income
is 60 percent or less of area median gross income.

    Section 42(l)(1) provides that following the close of the first taxable year in the

credit period with respect to any qualified low-income building, the taxpayer shall certify
to the Secretary (at such time and in such form and in such manner as the Secretary
prescribes) (D) the election made under § 42(g) with respect to the qualified low-income
housing project of which such building is a part, and (E) such other information as the
Secretary may require. In the case of a failure to make the certification required by the
preceding sentence on the date prescribed therefor, unless it is shown that such failure
is due to reasonable cause and not to willful neglect, no credit shall be allowable by
reason of § 42(a) with respect to such building for any taxable year ending before such
certification is made.

   Section 301.9100-7T(b) of the temporary Procedure and Administration

Regulations provides that for elections under the Tax Reform Act of 1986, the election
under § 42(g)(1) must be made for the taxable year in which the project is placed in
service and shall be made in the certification required to be filed pursuant to § 42(l)(1).
Form 8609 serves the purpose of the certification required to be filed pursuant to
§ 42(l)(1) and includes the election under § 42(g)(1). Section 301.9100-7T(a)(4)(i)
provides that the election under § 42(g)(1) is irrevocable.

   Sections 301.9100-1 through 301.9100-3 provide the standards the

Commissioner of Internal Revenue 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, 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 subtitles 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.
PLR-103484-13 3

   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 the facts submitted and the 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 elections under
§ 42(g)(1)(B) for the project buildings identified by BINS by filing within 120 days from
the date of this letter amended Forms 8609 that include the intended elections. The
amended Forms 8609 (along with a copy of this letter, enclosed herein) are to be sent
to the following address:

          Department of the Treasury
          Internal Revenue Service Center
          Philadelphia, PA 19255-0549

   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
project buildings otherwise qualify for credit under § 42, including whether project
buildings qualify for credit prior to issuance of the Forms 8609.

  This ruling is directed only to the taxpayer who requested it. Section 6110(k)(3)

provides that it may not be used or cited as precedent.

  In accordance with the power of attorney on file, a copy of this letter is being sent

to Taxpayer’s authorized representative.

                                      Sincerely,

                                      Associate Chief Counsel
                                      (Passthroughs & Special Industries)

                                         /s/ Christopher J. Wilson

                                      By: _______________________
                                          CHRISTOPHER J. WILSON
                                          Senior Counsel, Branch 5
                                          Office of Associate Chief Counsel
                                          (Passthroughs & Special Industries)

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

cc: