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Historic Tax Credits News Briefs - July 2016

(TIGTA) released an audit May 25 titled, “Available Data Are Not Being Used to Proactively Identify Potentially Erroneous Rehabilitation Credit Claims.” The goal of the audit was to evaluate how effectively the Internal Revenue Service (IRS) ensures that business taxpayer claims for the HTC are valid. The audit analyzes data collected from taxable year 2013. The TIGTA audit found that the IRS is not proactively using this third-party data to identify potentially erroneous HTC claims and the audit found that the IRS has not established processes to use the data to identify potentially invalid claims. Of these forms reviewed, TIGTA identified 39 taxpayers and 10 pass-through entities claiming nearly $47 million in HTCs that failed to provide either the required National Park Service (NPS) project number or the employer identification number of a pass-through entity. The audit found that the IRS lacks a process to identify invalid NPS project numbers or pass-through entity EINs during the processing of tax returns. Also, 12 taxpayers and three pass-through entities claimed more than $150,000 in HTCs, but provided an invalid NPS project number or pass-through entity employer identification number. TIGTA made recommendations based on its findings, including that the IRS should develop ways to use NPS data to identify potentially erroneous claims, the IRS should revise its electronic filing program to identify and reject tax returns claiming the HTC when the required information is not provided on Form 3468 or is invalid, and that the IRS work with Treasury’s Office of Tax Policy to propose clear reporting requirements for claiming the HTC. The report was published April 29 and is available at www.historictaxcredits.com.

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Maryland Senate Bill 759 was approved May 19 by Gov. Larry Hogan. The bill reauthorized the state HTC as the program’s sunset date was extended from July 1, 2017, to July 1, 2022. The program’s termination date was extended for commercial, small commercial and owner-occupied residential property rehabilitations. The credit remains 20 percent for commercial and residential properties, although projects can receive a 25 percent credit if they involve rehabilitating a high-energy performance, certified historic structure. S.B. 759 also renamed the program the Heritage Structure Rehabilitation Tax Credit Program. The bill can be viewed at www.historictaxcredits.com.

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WNC announced May 18 the completed conversion of a historic building into The Cameron Apartments in Minneapolis. The building, constructed in 1910, will now house 44 affordable homes. WNC provided approximately $4 million in HTC and low-income housing tax credit (LIHTC) equity to finance the adaptive reuse project. The Cameron Apartments includes a four-story building that provides 23 studio, 17 one- and four two-bedroom garden-style apartments for families. Amenities will include a fitness center, a picnic/grilling area and an on-site caretaker.

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Deco at CND Apartments in Richmond, Va., opened in late May. Built in 1929, the historic building, formerly the Central National Bank building, now houses 200 apartments, with 36 leased out at press time. The Virginia Department of Historic Resources noted in an article in the Richmond Times-Dispatch that the building is one of the largest HTC projects in Richmond and the state. The 23-story tower and attached annex will house 112 apartments and 88 apartments, respectively. There are studios and two-bedroom apartments. Amenities include a business center and lounge, game room, a leasing office, a clubroom and a fitness center. A rooftop terrace and fire pit on top of the annex are expected to be complete by August. Redevelopment costs will total $36 million. The building is listed on the National Register of Historic Places.

Journal Category:

Historic Tax Credits

Authors:

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