Housing project receives 120 days to make its minimum set-aside elections

Plain-English summary

A partnership owns a three-building low-income housing project and intended to make the 20-50 minimum set-aside election for each building. Its contemporaneous records reflected that intent, but the partnership omitted the elections from the Forms 8609 submitted to the IRS. The IRS concluded that the partnership met the standards for discretionary late-election relief. It granted 120 days to file amended Forms 8609 making the IRC § 42(g)(1)(A) election for all three buildings and to include a copy of the ruling. The decision does not determine whether the original forms were otherwise timely or correct, whether the project is qualified low-income housing, or whether the buildings qualify for the credit.

Ruling snapshot

• Question: May a low-income housing project make late 20-50 minimum set-aside elections omitted from Forms 8609?
• Outcome: Approved, with 120 days to file amended Forms 8609 for all three buildings
• Key authorities: IRC § 42(g), 42(l); Treas. Reg. §§ 1.42-1(h), 301.9100-1, 301.9100-3, 301.9100-7T

Full text (IRS public release)

 Internal Revenue Service                                       Department of the Treasury
                                                                Washington, DC 20224

 Number: 202536003                                              Third Party Communication: None
 Release Date: 9/5/2025                                         Date of Communication: Not Applicable
 Index Number: 42.00-00, 9100.01-00
                                                                Person To Contact:
                                                                -----------------, ID No. -----------------
                                                                Telephone Number:
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 --------------------------                                     Refer Reply To:
 ----------------------                                         CC:ECE:B01
 -----------------------------------                            PLR-102068-25
                                                                Date:
                                                                June 02, 2025

          In Re:
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LEGEND

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

State            =         ---------------------

Year 1           =         -------

Year 2           =         -------

BIN 1            =         ------------------

BIN 2            =         ------------------

BIN 3            =         ------------------


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

       This letter responds to Taxpayer’s authorized representative’s letter dated
January 31, 2025, and subsequent correspondence, 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 make an election under § 42(g)(1) of the
Internal Revenue Code (Code).

       According to the information submitted and representations made, Taxpayer, a
partnership for federal income tax purposes, owns and operates a multi-building,
low-income residential multi-family housing project (Project) located in State. The
building identification numbers of the buildings in the Project are BIN 1, BIN 2, and
PLR-102068-25                                 2

BIN 3. Taxpayer placed the buildings identified by BIN 1 and BIN 2 in service in Year 1
and the building identified by BIN 3 in service in Year 2.

       Taxpayer intended, as evidenced by Taxpayer’s contemporaneous documents,
to make a 20-50 minimum set-aside election under § 42(g)(1)(A) for each building in the
Project. However, on the Forms 8609 that Taxpayer submitted to the Internal Revenue
Service (IRS), Taxpayer inadvertently failed to make such election.

        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
§ 42(g)(1)(A), (B), or (C), whichever is elected by the taxpayer. The project meets the
requirements of § 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 § 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 § 42(g)(1)(C) if 40 percent or
more (25 percent or more in the case of a project described in § 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 § 42(g)(1), once made,
is irrevocable.

        Section 42(l)(1) describes the requisite certifications for any qualified low-income
building following the close of the first taxable year in the credit period (first-year
certifications). In particular, § 42(l)(1)(D) provides that, following the close of the first
taxable year in the credit period for any qualified low-income building, the taxpayer must
certify to the Secretary (at the time and in the form and the manner as the Secretary
prescribes) the election made under § 42(g) with respect to the qualified low-income
housing project of which the building is a part. 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 allowed by reason
of § 42(a) for the building for any taxable year ending before the certification is made.

        Section 301.9100-7T(b) of the temporary Procedure and Administration
Regulations provides, in part, that the election under § 42(g)(1) is to be made in the
certification required to be filed pursuant to § 42(l)(1).

       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 requirements for completing and filing Form 8609 are addressed in
the instructions to the form. The instructions to Form 8609 provide, in relevant part, that
a building owner must make a one-time submission of the original Form 8609 to the
Low-Income Housing Credit (LIHC) Unit at the IRS Philadelphia campus no later than
PLR-102068-25                                 3

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.

       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 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
§ 42(g)(1)(A) for each building in the Project by filing within 120 days from the date of
this letter amended Forms 8609 that include the intended election. The amended Forms
8609 (along with a copy of this letter) must be filed with the LIHC Unit at the following
address provided in the instructions to Form 8609.

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

      A copy of this letter is enclosed for each of the buildings in the Project for this
purpose.

       Except as specifically set forth above, we express or imply no opinion concerning
the federal tax consequences of the facts described above under any provisions of the
Code or regulations. In particular, we express or imply no opinion on whether the Forms
8609 for the Project were timely or correctly filed for purposes other than the intended
election under § 42(g)(1), or whether the Project is a qualified low-income housing
PLR-102068-25                                           4

project and the buildings in the Project qualify for the low-income housing credit 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.

      The ruling contained in this letter is based upon 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, we are sending a
copy of this letter to Taxpayer’s authorized representative.


                                                            Sincerely,

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




                                                       By: _________________________
                                                           James W. Rider II
                                                           Senior Counsel, Branch 1
                                                           Office of Associate Chief Counsel
                                                           (Energy, Credits, and Excise Tax)

Enclosure:
      Copy of this letter for § 6110 purposes

cc:       -------------------------------------
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