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IRS PROPOSES NEW UTILITY ALLOWANCE, QUALIFIED CONTRACT REGS

Monday, June 18, 2007 - 7:30AM

The Internal Revenue Service (IRS) today released proposed regulations to amend the utility allowances rules for the low-income housing tax credit (LIHTC) under Section 42 of the Internal Revenue Code (IRC). According to IRS, the proposed rules, established in response to concerns that the existing regulations need updating, provide additional options for estimating tenant utility costs. A hearing on the proposed utility regulation changes will be held October 9 and written comments will be accepted until September 17.

And in other breaking news, the IRS also today released proposed regulations regarding the qualified contract rules in IRC Section 42. The IRS says the proposed regulations contain guidance concerning taxpayers' requests to LIHTC agencies to obtain a qualified contract for the acquisition of an LIHTC building. Written comments on the proposed qualified contract regulations will be accepted until September 17 and a public hearing is slated for October 15.

Both proposed regulations will be formally published in tomorrow's Federal Register.

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