Source: https://www.irs.gov/irb/2019-12_IRB
Timestamp: 2019-12-16 06:41:54
Document Index: 685985830

Matched Legal Cases: ['§ 1', '§ 1', '§ 1', '§ 1', 'art 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', 'art 1', '§ 1', '§ 1', '§ 1', 'art 1', '§ 42', '§ 141', '§ 42', '§ 146', '§ 142', '§ 42', '§ 146']

Internal Revenue Bulletin: 2019-12 | Internal Revenue Service
Internal Revenue Bulletin: 2019-12
T.D. 9850
Notice 201917
Notice 201919
Announcement 201902
Announcement 2019–02 Announcement 2019–02
Notice 2019–17 Notice 2019–17
This notice provides a waiver of the addition to tax under section 6654 for underpayment of estimated income tax by qualifying farmers and fishermen for the 2018 tax year. This addition to tax is waived for any qualifying farmer or fisherman who files his or her 2018 federal income tax return with the proper waiver form and pays in full any tax due by April 15, 2019, or by April 17, 2019, for those taxpayers who live in Maine or Massachusetts.
Notice 2019–19 Notice 2019–19
Resident populations of the 50 states, the District of Columbia, Puerto Rico, and the insular areas for purposes of determining the 2019 calendar year (1) state housing credit ceiling under section 42(h) of the Code, (2) private activity bond volume cap under section 146, and (3) private activity bond volume limit under section 142(k) are reproduced.
T.D. 9850 T.D. 9850
These final regulations amend the utility allowance regulations concerning the low-income housing credit under section 42. These final regulations extend the principles of the current submetering rules to situations where the building owner independently generates and sells to tenants certain types of energy without the intervention of a local utility company.
This document contains final regulations that amend the utility allowance regulations concerning the low-income housing credit under section 42 of the Internal Revenue Code (Code). These final regulations extend the principles of the current submetering rules. The current rules address situations in which a building owner purchases a utility from a utility company and then separately charges the tenants for the utility. In those situations, if the utility costs paid by a tenant are based on actual consumption in the tenant’s submetered, rent-restricted unit and if certain other requirements are satisfied, then the charges for the utility are treated as paid by the tenant directly to the utility company, even though the payment passes through the building owner. The final regulations extend these principles and apply to situations in which a building owner sells to tenants energy that is produced from a renewable source and that the owner did not purchase from or through a local utility company. The final regulations affect owners of low-income housing projects that claim the credit, the tenants in those low-income housing projects, and the State and local housing credit agencies that administer the credit.
Applicability Date: For dates of applicability, see § 1.42–12(a)(5).
On March 3, 2016, the Department of the Treasury (Treasury Department) and the IRS published in the Federal Register (81 FR 11104) final and temporary regulations (TD 9755) that amended § 1.42–10 of the Income Tax Regulations. The final regulations in TD 9755 clarified the circumstances in which utility costs paid by a tenant based on actual consumption in a submetered, rent-restricted unit are treated as paid by the tenant directly to the utility company and not to the building owner. In such a case, for purposes of section 42, the tenant’s payments to the owner for the utilities are not treated as payments of gross rent, and the rent that the owner might otherwise have collected for the unit is reduced by an amount that is called a “utility allowance.” The temporary regulations extended the principles of those final regulations to situations in which a building owner sold to tenants energy that was produced from a renewable source and that the owner had not purchased from or through a local utility company.
In the same issue of the Federal Register (81 FR 11160), the Treasury Department and the IRS published a notice of proposed rulemaking (REG–123867–14) (the proposed regulations). The text of the proposed regulations incorporated by cross-reference the text of the temporary regulations. The Treasury Department and the IRS received written and electronic comments responding to the proposed regulations. No requests for a public hearing were made, and no public hearing was held.
A commenter requested that the final regulations clarify how a building owner may demonstrate that the rate that the owner charges tenants for renewable energy satisfies this requirement (the evidentiary issue). In addition, if there are multiple local utility rates that the tenants might have been charged (possibly from multiple utility companies), the commenter asked for clarification as to which rate or rates should be taken into account in determining whether the owner’s charges to the tenants qualify (the reference-rate issue).
The final regulations resolve both of these issues. Addressing the reference-rate issue, the final regulations require that the rate that the owner charges must not exceed the highest rate at which the tenants might have obtained energy from a local utility company. This criterion has several advantages over alternatives. For example, it is easily administrable (as compared, for example, with a requirement that the owner’s rate not exceed the “most typical rate” in the community). Also, the criterion protects an owner’s qualifying rate from being disqualified by the introduction of new rates in the community (as might be the case, for example, if the reference for the criterion were the average or median of local rates).
Under section 42(g)(1) and (2), a residential unit may qualify as a low-income unit only if it is “rent-restricted.” The amount that qualifies as restricted rent is determined based on the assumption that most utilities are generally covered by that rent. See H.R. Conf. Rep. 99–841, at II–94 (1986). For that reason, if the tenant pays for a utility directly, the rent that the owner may require from the tenant is reduced. The amount of this reduction is called a “utility allowance.” See section 42(g)(2)(B)(ii) and § 1.42–10(a). Language in the preamble of TD 9755 states that utility costs paid by a tenant based on actual consumption in a submetered, rent-restricted unit are treated as paid by the tenant directly to the utility and thus do not count against the maximum rent that the building owner can charge. Referencing this language, one commenter requested that the final regulations clarify whether a building owner of a submetered building is required to reduce its maximum gross rents by the amount of a utility allowance. Because § 1.42–10(e) treats a tenant in a submetered, rent-restricted unit as having paid for a utility directly and not by or through the owner of the building, the proper treatment of the tenant’s submetered utility payments is the same as if the tenant had made those payments directly to the utility company—(1) Although the payments pass through the building owner, they are not treated for purposes of the rent restriction as if they were payments of rent; and (2) The amount of rent that the owner might otherwise have demanded from the tenant is reduced by the amount of an applicable utility allowance.
Paragraph 1. The authority citation for part 1 is amended by removing the entry for § 1.42–10T to read in part as follows:
Sections 1.42–6, 1.42–8, 1.42–9, 1.42–10, 1.42–11, and 1.42–12, also issued under 26 U.S.C. 42(n).
Par. 2. Section 1.42–0T is amended by removing the entries for § 1.42–10T.
Par. 3. Section 1.42–10 is amended by:
§ 1.42–10 Utility allowances.
(2) It is energy that is produced from a facility described in section 45(d)(1), (2), (3), (4), (6), (9), or (11); or
(D) Determinations under paragraph (e)(1)(i)(C)(1) and (2) of this section take into account only the manner in which the energy is produced and not who owns the energy property or the facility or whether the applicability of relevant portions of sections 45 and 48 has expired.
§ 1.42–10T [Removed]
Par. 5. Section 1.42–10T is removed.
Par. 6. Section 1.42–12 is amended by:
§ 1.42–12 Effective dates and transitional rules.
(E) Section 1.42–10(e), except as provided in paragraph (a)(5)(iii) of this section.
(ii) Except as provided in paragraph (a)(5)(iii) of this section, a building owner may apply the provisions described in paragraph (a)(5)(i)(A)–(E) of this section to the building owner’s taxable years beginning before March 3, 2016. Otherwise, the utility allowance provisions that apply to those taxable years are contained in § 1.42–10, as contained in 26 CFR part 1, revised as of April 1, 2015.
(iii) The provisions in § 1.42–10(e)(1)(i) introductory text, (e)(1)(i)(B)–(D), and (e)(1)(iv)(B) apply to a building owner’s taxable years beginning on or after March 4, 2019. A building owner, however, may apply these provisions to earlier taxable years. Otherwise, the submetering provisions that apply to taxable years beginning after March 3, 2016, and before March 4, 2019 are contained in § 1.42–10 and § 1.42–10T as contained in 26 CFR part 1 revised as of April 1, 2016. In addition, a building owner may apply those submetering provisions to taxable years beginning before March 3, 2016.
(Filed by the Office of the Federal Register on February 27, 2019, 4:15 p.m. and published in the issue of the Federal Register for March 4, 2019, 84 F.R. 7283)
Notice 2019–17
Notice 2019–19
This notice advises State and local housing credit agencies that allocate low-income housing tax credits under § 42 of the Internal Revenue Code, and States and other issuers of tax-exempt private activity bonds under § 141, of the population figures to use in calculating: (1) the 2019 calendar year population-based component of the State housing credit ceiling (Credit Ceiling) under § 42(h)(3)(C)(ii); (2) the 2019 calendar year volume cap (Volume Cap) under § 146; and (3) the 2019 volume limit (Volume Limit) under § 142(k)(5).
Sections 42(h)(3)(H) and 146(d)(2) require adjusting for inflation the population-based component of the Credit Ceiling and the Volume Cap. The Credit Ceiling adjustment for the 2019 calendar year is in Rev. Proc. 2018–57, 2018–49 I.R.B. 827. Section 3.10 of Rev. Proc. 2018–57 provides that, for calendar year 2019, the amount for calculating the Credit Ceiling under § 42(h)(3)(C)(ii) is the greater of $2.75625 multiplied by the State population, or $3,166,875. Further, section 3.21 of Rev. Proc. 2018–57 provides that the amount for calculating the Volume Cap under § 146(d)(1) for calendar year 2019 is the greater of $105 multiplied by the State population, or $316,745,000.
For the 50 states, the District of Columbia, and Puerto Rico, the population figures for calculating the Credit Ceiling, the Volume Cap, and the Volume Limit for the 2019 calendar year are the resident population estimates released electronically by the U.S. Census Bureau on December 19, 2018, and described in Press Release CB18–193. For American Samoa, Guam, the Northern Mariana Islands, and the U.S. Virgin Islands, the population figures for the 2019 calendar year are the 2018 midyear population figures in the U.S. Census Bureau’s International Data Base (IDB). The U.S. Census Bureau electronically announced an update of the IDB on September 18, 2018, in Press Release CB18-TPS.45.