TIGTA Report: IRS Needs More Procedures to Address QOF, Investor Noncompliance

Thursday, February 10, 2022 - 3:45pm

A report issued this week by the Treasury Inspector General for Tax Administration, Additional Actions Are Needed to Address Qualified Opportunity Zone Fund and Investor Noncompliance, makes eight recommendations for the Internal Revenue Service (IRS) to improve its processes and procedures concerning compliance with the opportunity zones (OZ) incentive and reporting requirements–which primarily involve Forms 8996 and 8997. The IRS agreed with six of the recommendations, disagreeing with a recommendation to develop procedures and processes to decertify qualified opportunity funds (QOFs) that intentionally don’t comply with requirements and also disagreeing with a recommendation to develop interim processes and procedures to identify and track accounts identified with erroneous QOF indicator codes.

Reporting requirements and regulations concerning the OZ incentive will be a topic at the Novogradac 2022 Spring Opportunity Zones Conference.