Housing project received 120 days to make the average-income election

Plain-English summary

The owner of a single-building low-income housing project intended to elect the average-income minimum set-aside. Contemporaneous documents supported that intent, but the owner inadvertently omitted the election from Form 8609. The IRS found that the owner met the standards for discretionary late-election relief. It granted 120 days to file an amended Form 8609 making the section 42(g)(1)(C) election. The ruling does not decide whether the original Form 8609 was otherwise timely or whether the project qualifies for the low-income housing credit.

Ruling snapshot

• Question: May the project owner make a late average-income minimum set-aside election?
• Outcome: Approved
• Key authorities: IRC §§ 42 and 142; Treas. Reg. §§ 1.42-1 and 301.9100-1 through 301.9100-3

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202525001 Third Party Communication: None
Release Date: 6/20/2025 Date of Communication: Not Applicable
Index Number: 42.00-00, 9100.00-00,
9100.01-00 Person To Contact:
----------------------------, ID No. --------------
------------------- -----------------
--------------------------------- Telephone Number:
------------------------------------- ---------------------
------------- Refer Reply To:
CC:ECE:B01
In Re: PLR-100813-25
--------------------------------- Date:
March 24, 2025

LEGEND

Taxpayer = ---------------------------------------------
-----------------------
Agency = ---------------------------------------------
------------------------------
Address = ---------------------------------------------
-------------------------
BIN = -----------------
Year-X = -------
Year-Y = -------

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

  This letter responds to your authorized representative's letter, dated December

20, 2024, submitted on behalf of Taxpayer, requesting an extension of time, pursuant to
§§ 301.9100-1 and 301.9100-3 of the Procedure and Administration Regulations, to file
an amended Form 8609, Low-Income Housing Credit Allocation and Certification, with
respect to the election related to section 42(g)(1) of the Internal Revenue Code (Code).

   According to the information submitted, Taxpayer owns and operates a single-

building housing project (Project) subject to a Land Use and Restriction Agreement with
the Agency entered into in Year-X. The Project was placed in service in Year-Y. The
Project consists of one building for section 42 purposes. The building identification
number associated with the Project is BIN. The Project is located at Address.

  Taxpayer intended, as evidenced by Taxpayer’s contemporaneous documents,

to make the average income minimum set-aside election for the Project. However, on
the Form 8609 that Taxpayer submitted to the Internal Revenue Service (IRS),
Taxpayer inadvertently failed to make such election.
PLR-100813-25 2

    Section 42(g)(1) defines the term “qualified low-income housing project” as any

project for residential rental property if the project meets the requirements of section
42(g)(1)(A), (B), or (C), whichever is elected by the taxpayer. The project meets the
requirements of section 42(g)(1)(A) if 20 percent or more of the residential units in the
project 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 section
42(g)(1)(B) if 40 percent or more of the residential units in the project are both rent-
restricted and occupied by individuals whose income is 60 percent or less of area
median gross income. The project generally meets the requirements of section
42(g)(1)(C) if 40 percent or more (25 percent or more in the case of a project described
in section 142(d)(6)) of the residential units in the project are both rent restricted and
occupied by individuals whose income does not exceed the imputed income limitation
designated by the taxpayer with respect to the respective unit. Any election under
section 42(g)(1), once made, is irrevocable.

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

Regulations provides, in part, that the election under section 42(g)(1) is to be made in
the certification required to be filed pursuant to section 42(l)(1).

     Section 42(l)(1) describes the requisite certifications with respect to any qualified

low-income building for the first taxable year of the credit period (first-year
certifications). In the case of a failure to make the required certification on the date
prescribed for it, unless it is shown that the failure is due to reasonable cause and not to
willful neglect, no credit is to be allowable by reason of section 42(a) for the building for
any taxable year ending before the certification is made.

   Section 1.42-1(h) of the Income Tax Regulations provides, in part, that, unless

otherwise provided in forms or instructions, a completed Form 8609 (or any successor
form), which contains the first-year certifications, must be filed by the building owner
with the IRS. The instructions to Form 8609 state, in relevant part, that a building owner
must make a one-time submission of Form 8609 to the Low-Income Housing Credit
(LIHC) Unit at the IRS Philadelphia campus (Service Center) no later than the due date
(including extensions) of the first tax return with which the building owner is filing Form
8609-A, Annual Statement for Low-Income Housing Credit.

   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.
PLR-100813-25 3

   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.

    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 election under section 42(g)(1)(C)
for the Project by filing within 120 days from the date of this letter an amended Form
8609 that includes the intended election. The amended Form 8609 (along with a copy
of this letter) is to be filed with the Philadelphia campus at the address provided in the
instructions to Form 8609. 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 Form 8609 for the Project was timely or correctly filed for purposes other than the
intended election under section 42(g)(1), or whether the Project is a qualified low-
income housing project and the building in the Project qualifies for the low-income
housing credit under section 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.

  The ruling contained in this letter is based on the information submitted and

representations made by Taxpayer and accompanied by a penalty of perjury statement
executed by an appropriate party. While this office has not verified any of the material
submitted in support of the request for ruling, it is subject to verification on examination.

     In accordance with the Power of Attorney on file with this office, a copy of this

letter is being sent to your authorized representatives.
PLR-100813-25 4

                                                Sincerely,

                                                Associate Chief Counsel
                                                (Energy, Credits, & Excise Tax)



                                          By:
                                                Dillon J. Taylor
                                                Senior Technician Reviewer, Branch 1
                                                Office of Associate Chief Counsel
                                                (Energy, Credits, & Excise Tax)

Enclosure:
Copy of this letter
Copy for section 6110 purposes

CC:

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

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

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

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

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

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

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