GAO Report on OZs Calls for IRS to Take Steps to Address Risks of Limited Data Availability
The U.S. Government Accountability Office (GAO) today released a report on the opportunity zone (OZs) incentive with two major recommendations: that the Internal Revenue Service (IRS) address risks caused by limited data availability and take steps to mitigate those risks, and that the IRS research compliance risks of high-wealth investors and large partnership qualified opportunity funds (QOFs). GAO found that on average, the census tracts selected and designated as OZs had higher poverty and a greater share of non-White populations than eligible, but not selected, tracts, and that these differences were statistically significant. In addition, the GAO report found that state and territory government officials were largely aware of some OZ investments, but were split on the incentive’s effect–with 30 of the 56 respondents saying it was either a net positive or net neutral, while 20 were not sure. The report also said that through 2019, more than 6,000 QOFs had invested about $29 billion in OZs, based on partial data from the IRS.
Keep up with OZ developments and expert analysis with the Novogradac Journal of Tax Credits.