The Credential - March 2020
Message from the Chair
Welcome to the first edition of The Credential in the new decade!
2020 marks the third decade of the 21st century, and as I reflect on our progress over the past year, I would like to say “thank you” for your continued commitment to providing affordable housing and to the Low-Income Housing Tax Credit (LIHTC) community. It is a huge honor and a great privilege to serve as the chair for the Housing Credit Certified Professional (HCCP) Board of Governors. In collaboration with a diverse board comprising professionals from various sectors of our industry, I hope to not only maintain the integrity of the HCCP credential, but to increase awareness to the current issues within the industry and contribute toward growth in your professional endeavors.
On Jan. 30, the Internal Revenue Service (IRS) released Revenue Ruling 2020-4, a widely anticipated official interpretation on the method of determining the income limits for the average income (AI) minimum set-aside test. A clear explanation of the guidance is provided by Mark Shelburne, housing policy consultant for Novogradac, and Thomas Stagg, CPA and partner with Novogradac, in this month’s edition of The Credential. This is the first IRS guidance on the topic of AI since the Consolidated Appropriations Act of 2018 revised Internal Revenue Code (IRC) Section 42 to include the AI as a new option for the minimum set-aside. Although many interpretations had been published, the industry remains optimistic of additional guidance from the IRS to follow.
Shortly after the release of the RR 2020-4, the Department of Housing and Urban Development (HUD) issued the FY 2019 Multifamily Tax Subsidy Projects (MTSP) income limits for Average Income LIHTC properties. Limits are available in HUD User website.
Shelburne and Stagg also share clarification on the new concern on issuing IRS Forms 8609. They discuss the potential effects caused by the creation of centralized partnership audit regime (CPAR), as part of the Bipartisan Budget Act of 2015, resulting in a new process for amending or making changes to certain federal partnership tax returns effective for tax years beginning after Dec. 31, 2017.
The third article is the continuing series by Amanda Gross from US Housing Consultants. Gross discusses the utilization of the Public Housing Authority Utility Allowance Schedule. As we expect publication of new income limits — with everpresent challenges involving the calculation, implementation and the source of utility allowances — it is important to understand the options available to us.
Our final article, by Scott Michael Dunn with Costello Compliance, continues the Back to Basics series. This edition focuses on tenant transfers, and clarifies fundamental principles and caveats, as well as the impact during the first year of the credit period. It also brings awareness to the way the federal rules may not be aligned with the state agencies. This article is a must-read for those who are in the process of developing a tenant transfer policy, and for others, a good reminder to keep the property in compliance.
Finally, as part of our regular spotlight articles, we introduce:
- Board of Governors member: Laurie Fritz, director of quality assurance with Kansas Housing Resources Corporation
- An HCCP exam distributor: Mandi Barnes with Zeffert & Associates
- 2019 HCCP Designee of the Year: Scott Michael Dunn of Costello Compliance.
As a reminder, NAHB is hosting “Stay Compliant! How to Manage the Latest Income Limits/Utility Allowance Changes and Avoid Costly Errors,” a webinar presented by Scott Michael Dunn, on March 26. Webinars are available free of charge to all active members of the HCCP community and offer a perfect way to meet your continuing education requirements.
I hope you find the information provided in this publication of The Credential to be informative and useful. To ensure that we are addressing the topics that are most important to you, we welcome your feedback and suggestions.
Kristin Han, HCCP
WNC & Associates
Chair, HCCP Board of Governors
Stories in This Edition:IRS Guidance on Average Income AMI Calculations
New Concern Over Issuing IRS Forms 8609
Utility Allowance Series, Part 3
Back to Basics, Part 5: Transfers
HCCP Board of Governors Spotlight
HCCP Designee Spotlight
HCCP Distributor Spotlight