IRS Issues Guidance on LIHTC Local Approval, Revitalization Plans

Monday, December 12, 2016 - 11:15am

When complying with fair housing rules, low-income housing tax credit (LIHTC) developments don’t require local approval and should receive preference for contributing to community revitalization only if there are components in a plan other than the development itself, according to an Internal Revenue Service (IRS) revenue ruling and notice.

Revenue Ruling 2016-29 states that Internal Revenue Code (IRC) neither forces nor encourages a state allocating agency to require local approval. Notice 2016-77 states that the allocation preference for LIHTC properties in a qualified census tract that contribute to a concerted community revitalization plan applies only if a plan containing components in addition to the LIHTC development exists by the allocation date.