The National Council of State Housing Agencies is asking the Internal Revenue Service and the Treasury Department to include guidance on tax-exempt bond and low-income housing tax credit issues in their 2013-2014 priority list.
The NCSHA made the request in a letter sent to the agencies in May but it wasn’t publicly disclosed until now. Garth Rieman, director of NCSHA housing advocacy and strategic initiatives, wrote the letter.
Specifically, the group recommended the IRS issue final guidance on the length of time issuers of tax-exempt bonds must maintain loan documents. The IRS last requested comments on this issue in 2006, but has not since issued final regulations. The current rules require an issuer to maintain loan records for the life of a bond issue, as well as any refundings of that bond issue, plus an additional six years, regardless of when the loan is paid off.
The group said this requirement “generate[s] excessive compliance costs, particularly with regard to older loans, which are not stored electronically.”
The NCSHA also requested final regulations under Section 147 of the federal tax code that would simplify the public approval requirements for private-activity bonds issued by state and local governments. In 2008, the Treasury issued proposed regulations under the Tax Equity and Fiscal Responsibility Act of 1982, or TEFRA.
Several other muni bond groups have expressed similar concerns about record retention and TEFRA issues.
The NCSHA also asked for guidance on several issues related to the low-income housing tax credit under Section 42(d)(6).
The Housing and Economic Recovery Act of 2008 exempts federally or state assisted buildings from the 10-year prior placement in service, under federal tax law. The term “federally assisted building” means any building that is “substantially” assisted, financed or operated under Section 8 of the U.S. Housing Act of 1937, and several other housing programs operated by the Department of Housing and Urban Development. The council urged the IRS to clarify how it defines “substantially.”
The NCSHA also suggested the IRS issue final regulations concerning housing finance agencies’ housing credit monitoring procedures to provide an efficient framework for compliance and information that will help the IRS with oversight. “
Finally, the council asked for final regulations concerning utility allowance calculations for housing credit developments that sub-meter.
The group has requested regulations that generally allow for more accurate utility-allowance determinations and that provide greater flexibility to make such determinations. They also want regulations that will help housing finance agencies promote energy efficiency in housing credit properties.
“We reiterate these principles and urge the IRS to ensure that any final guidance concerning utility allowances for sub-metered buildings does not impose any unnecessary administrative burdens or complexity on HFAs,” Rieman wrote.
