Housing project gets 120 days to make omitted average-income election

Plain-English summary

The owner of a multi-building low-income housing project intended to elect the average-income minimum set-aside under Section 42(g)(1)(C). Its contemporaneous records showed that intent, but it inadvertently omitted the elections from the Forms 8609 filed with the IRS. The owner asked for an extension under the regulatory relief rules for late elections. Based on the submitted facts and representations, the IRS found that the requirements of Treasury Regulations Sections 301.9100-1 and 301.9100-3 were met. It granted 120 days from the ruling date to file amended Forms 8609 making the intended elections. The IRS did not decide whether the project or its buildings otherwise qualify for the low-income housing credit.

Ruling snapshot

• Question: May the project owner receive more time to make the Section 42(g)(1)(C) elections omitted from its Forms 8609?
• Outcome: approved
• Key authorities: IRC § 42(g)(1), (l)(1); Treas. Reg. §§ 301.9100-1 and 301.9100-3; Treas. Reg. § 1.42-1(h)

Full text (IRS public release)

 Internal Revenue Service                                    Department of the Treasury
                                                             Washington, DC 20224

 Number: 202552023                                           Third Party Communication: None
 Release Date: 12/26/2025                                    Date of Communication: Not Applicable
 Index Number: 9100.01-00, 42.00-00
                                                             Person To Contact:
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                                                             PLR-113810-25
 In Re:                                                      Date:
          ------------------------------------------         August 07, 2025




LEGEND


 Taxpayer         = -------------------------------------------------------------
                    -----------------------
 State            = ----------------
 Years            = -------------------------------------------------------------
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 BINs             = -------------------------------------------------------------
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 Address          = -------------------------------------------------------------
                    ----------------------------
 N                = ---

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

       This letter responds to your authorized representative's letter, dated March 26,
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 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 and representations made, Taxpayer
owns and operates a multiple-building housing project (Project) in State. The buildings
were placed in service in Years. The Project consists of N buildings for section 42

PLR-113810-25                                  2

purposes. The building identification numbers associated with the Project are BINs. 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 Forms 8609 that Taxpayer submitted to the Internal Revenue Service (IRS),
Taxpayer inadvertently failed to make such elections.

        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 42(g)(3) provides that, in general, a building shall be treated as a
qualified low-income building only if the project (of which such building is a part) meets
the requirements of section 48(g)(1) not later than the close of the first year of the credit
period for such building.

       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 states, 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

PLR-113810-25                                 3

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 elections under
section 42(g)(1)(C) for the Project 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) are to be filed with the Philadelphia campus at the
address provided in the instructions to Form 8609.

        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
Project is a qualified low-income housing project and the buildings in the Project qualify
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

PLR-113810-25                                              4

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 representative.

                                                        Sincerely,

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

                                                         /s/ Dillon J. Taylor

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

Enclosure:
      Copy of this letter for section 6110 purposes

CC:
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