Housing project received 120 days to make 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 § 42(g)(1)(C), as shown by contemporaneous records, but inadvertently omitted the election from its Forms 8609. The IRS found that the owner acted reasonably and in good faith and that relief would not prejudice the government. It granted 120 days to file amended Forms 8609 making the election. The ruling did not decide whether the forms were otherwise timely or correct or whether the project and its buildings qualified for the credit.

Ruling snapshot

• Question: Could a low-income housing project owner obtain additional time to make the average-income minimum set-aside election on Forms 8609?
• Outcome: Relief approved, with 120 days to file amended forms
• Key authorities: IRC § 42(g), (l); Treas. Reg. §§ 1.42-1(h), 301.9100-1, 301.9100-3, 301.9100-7T

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202538014 Third Party Communication: None
Release Date: 9/19/2025 Date of Communication: Not Applicable
Index Number: 42.00-00, 9100.00-00,
9100.01-00 Person To Contact:
-------------------------, ID No. -----------------

------------------------------ Telephone Number:

-------------------- Refer Reply To:
----------------------------- CC:ECE:B01
In Re: ---------------------------------- PLR-120332-24
Date:
March 12, 2025

LEGEND

Taxpayer = -----------------------------------

State = -------------

Address = -----------------------------------------------------

A = --

BINs = -----------------------------------------------------------------------------------------------

Year-X = -------

Year-Y = -------

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

This letter responds to your authorized representative's letter, dated October 9,
2024, 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 related to section 42(g)(1) of
the Internal Revenue Code (Code).

According to the information submitted, Taxpayer owns and operates a multi-
building housing project (Project) subject to a Regulatory Agreement with State in Year-
X, and that was placed in service in Year-Y. The Project consists of A buildings for
section 42 purposes. The building identification numbers associated with the Project are
BINs. The Project is located at Address.

PLR-120332-24 2

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 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
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.

PLR-120332-24 3

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.

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 includes the intended election. 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. A copy of this letter is enclosed for this
purpose.

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 Forms
8609 for the Project were timely or correctly filed for purposes other than the intended
elections under section 42(g)(1), or 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
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.

PLR-120332-24 4

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)

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

Enclosure:
Copy of this letter
Copy for section 6110 purposes

Cc:

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