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IRS PUBLISHES UTILITY ALLOWANCE GUIDANCE CLARIFICATION

Tuesday, May 5, 2009 - 8:00AM

The Internal Revenue Service (IRS) today issued guidance in Notice 2009-44 to clarify that utility costs paid by a tenant and based on actual consumption in a sub-metered rent-restricted unit are treated as paid directly by the tenant for purposes of Section 42(g)(2)(B)(ii) of the Internal Revenue Code. The IRS says that building owners may rely on Notice 2009-44 for any utility allowances effective no earlier than the first day of the building owner's taxable year beginning on or after July 29, 2008. The IRS will accept comments on Notice 2009-44 through July 27, 2009.

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