IRS grants more time to fix a wrongly checked box on low-income housing credit forms

Plain-English summary

A partnership that owns a multi-building low-income housing project claimed
the low-income housing tax credit under Code § 42. When it filed Forms
8609 for certain buildings, it accidentally checked the box on line 10a
electing to start the 10-year credit period in the year after the
buildings were placed in service, rather than in the placed-in-service
year it had actually intended. Because the § 42(f)(1) election is
irrevocable once made, the partnership needed IRS permission to correct
it. It asked for an extension of time under the "9100 relief" regulations
(§§ 301.9100-1 and 301.9100-3), which let the IRS grant more time to make
or fix a regulatory election if the taxpayer acted reasonably and in good
faith and relief does not prejudice the government. The IRS found those
standards met and granted an extension: the partnership may file amended
Forms 8609 within 120 days solely to check the correct box and start the
credit period in the intended year. The IRS expressed no opinion on
whether the project or buildings actually qualify for the credit.

Ruling snapshot

• Question: Should the taxpayer get an extension of time under
  § 301.9100-3 to file amended Forms 8609 correcting the § 42(f)(1)
  credit-period election?
• Outcome: Approved (extension granted; amended forms due within 120
  days)
• Key authorities: IRC § 42(f)(1), § 42(l)(1); Treas. Reg.
  §§ 301.9100-1, 301.9100-2, 301.9100-3, 301.9100-8; Treas. Reg.
  § 1.42-1(h)

Full text (IRS public release)

Internal Revenue Service                     Department of the Treasury
                                             Washington, DC 20224

Number: 202050013                            [Third Party Communication:
Release Date: 12/11/2020                     Date of Communication: Month DD, YYYY]
Index Number: 42.00-00, 9100.00-00

Person To Contact:
--------------------------------, ID No. ----------
Telephone Number:
--------------------
Refer Reply To:
CC:PSI:B05
PLR-112552-20
Date:
September 16, 2020

In Re:
         ---------------------------------------------------

LEGEND

Taxpayer = ----------------------------------------------------------------------------------------------
State    = ----------------
Address  = ----------------------------------------------------------------------------------------------
a        = ----------------------------------------------------------------------------------------------
BINs     = ----------------------------------------------------------------------------------------------
Year     = -------

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

        This letter responds to Taxpayer's authorized representative's letter dated April
22, 2020, 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 amended Forms 8609, Low-Income
Housing Credit Allocation and Certification, with respect to the elections under § 42(f)(1)
of the Internal Revenue Code made for certain buildings in a housing project intended to
be a low-income housing project under § 42.

       According to the information submitted and representations made, Taxpayer, a
partnership for federal income tax purposes, owns and operates a multi-building
housing project in State. The project is located at Address. The project received an
allocation of the low-income housing credit under § 42. The project consisted of a
buildings for § 42 purposes. The buildings identified by BINs are part of the project.
Taxpayer placed the buildings identified by BINs in service in Year. Taxpayer intended,
as reflected by contemporaneous and other documents, to begin the credit periods for
the buildings identified by BINs in Year. However, in preparing Forms 8609 for the
buildings identified by BINs, Taxpayer inadvertently checked the boxes on Forms 8609,
line 10a, to begin credit periods for the buildings the first year after the buildings were
placed in service. Shortly after filing Forms 8609 with the Internal Revenue Service
(IRS), Taxpayer discovered the inadvertent errors.

        Section 42(f)(1) defines the credit period of any building as the period of 10
taxable years beginning with the taxable year in which the building is placed in service,
or at the taxpayer's irrevocable election, the succeeding taxable year, but in either case
only if the building is a qualified low-income building at the close of the first year of the
credit period.

       Section 301.9100-8(b) provides that the election under § 42(f)(1) generally must
be made for the taxable year in which the building is placed in service, or the
succeeding taxable year if the § 42(f)(1) election is made to defer the start of the credit
period, and must be made in the certification required to be filed pursuant to § 42(l)(1)
and (2). Section 301.9100-8(a)(4)(i) provides that the election under § 42(f)(1) is
irrevocable.

       Specifically, the election under § 42(f)(1) is made pursuant to the certification
requirement of § 42(l)(1)(E), which provides that following the close of the first taxable
year in the credit period with respect to any qualified low-income building, the taxpayer
shall certify to the Secretary (at such time and in such form and in such manner as the
Secretary prescribes) such other information as the Secretary may require.

        Section 1.42-1(h) of the Income Tax Regulations provides that a completed Form
8609 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 that the building owner must make a one-
time submission of Form 8609 to the Low-Income Housing Credit (LIHC) Unit at the IRS
Philadelphia campus. The building owner must file the original of the Form 8609 with
the LIHC Unit no later than the due date (including extensions) of its first tax return with
which it 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 subtitles 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 (including affidavits described in § 301.9100-3(e)) to establish that
the taxpayer acted reasonably and in good faith, and that granting relief will not
prejudice the interests of the government.

        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 file an amended Form 8609 for each of the
buildings identified by BINs for the sole purpose of checking the correct box on line 10a
of the form to begin the credit period for the building in Year. The amended Forms 8609
must be filed within 120 days from the date of this letter. The amended Forms 8609
(each 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

         Copies of this letter are enclosed for this purpose.

       No opinion is expressed or implied regarding the application of any other
provisions of the Code or regulations. In particular, we express no opinion on whether
the project is a qualified low-income housing project or whether the buildings identified
by BINs otherwise qualify for the low-income housing credit under § 42.

      This ruling is directed only to the taxpayer who requested it. Section 6110(k)(3)
provides that it may not be used or cited as precedent.

      The ruling contained in this letter is based upon information and representations
submitted 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 rulings, it is subject to verification on examination.


                                                     Sincerely,

                                                     Associate Chief Counsel
                                                     (Passthroughs and Special Industries)



                                               By:
                                                     JIAN H. GRANT
                                                     Senior Technician Reviewer, Branch 5
                                                     Office of Associate Chief Counsel
                                                     (Passthroughs and Special Industries)



Enclosures (2):
      Copy of this letter
      Copy for § 6110 purposes


CC:       ----------------------------------