The IRS released proposed regulations in regards to Housing Credit Program monitoring requirements, returning to a previous standard of required inspection of the lesser of the applicable REAC number of 20% of the low-income units in the development.
The proposed monitoring regs returns the required number of units to be inspected to the amount required before the temporary regulations were issued & finalized in 2019. Those regulations mandated that agencies inspect at least as many units as the number specified for properties of the relevant size in the REAC numbers, which sometimes exceeded 20%. The proposed regulations allow agencies to inspect the lesser of the applicable REAC number or 20%. The regulations allow agencies to rely on the proposed regulations from Feb. 26, 2019, until Dec. 31 of the calendar year after the regulations are published as final regulations.
Despite the proposed nature of these regulations, the regulations are effective immediately. IRS will gather comments in the meantime. Comments on the proposed regulations will be accepted until 60 days after the regulations are published in the Federal Register.
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