Virginia Administrative Code › Title 13 - HOUSING › Agency 10 - VIRGINIA HOUSING DEVELOPMENT AUTHORITY › Chapter 180 - RULES AND REGULATIONS FOR ALLOCATION OF LOW-INCOME HOUSING TAX CREDITS › Section 13VAC10-180-90 - Monitoring for IRS compliance

Current through Register Vol. 40, No. 24, July 15, 2024
A. Federal law requires the authority to
				monitor developments receiving credits for compliance with the requirements of
				§ 42 of the IRC and notify the IRS of any noncompliance of which it
				becomes aware. Compliance with the requirements of § 42 of the IRC is the
				responsibility of the owner of the building for which the credit is allowable.
				The monitoring requirements set forth in this section are to qualify the
				authority's allocation plan of credits. The authority's obligation to monitor
				for compliance with the requirements of § 42 of the IRC does not make the
				authority liable for an owner's noncompliance, nor does the authority's failure
				to discover any noncompliance by an owner excuse such noncompliance.
B. The owner of a low-income housing
				development must keep records for each qualified low-income building in the
				development that show for each year in the compliance period:
1. The total number of residential rental
				units in the building (including the number of bedrooms and the size in square
				feet of each residential rental unit).
2. The percentage of residential rental units
				in the building that are low-income units.
3. The rent charged on each residential
				rental unit in the building (including any utility allowances).
4. The number of occupants in each low-income
				unit, but only if rent is determined by the number of occupants in each unit
				under § 42(g)(2) of the IRC (as in effect before the amendments made by
				the federal Revenue Reconciliation Act of 1989).
5. The low-income unit vacancies in the
				building and information that shows when, and to whom, the next available units
				were rented.
6. The annual income
				certification of each low-income tenant per unit.
7. Documentation to support each low-income
				tenant's income certification (for example, a copy of the tenant's federal
				income tax return, Forms W-2, or verifications of income from third parties
				such as employers or state agencies paying unemployment compensation). Tenant
				income is calculated in a manner consistent with the determination of annual
				income under section 8 of the United States Housing Act of 1937, 42 USC §
				1401 et seq. (section 8), not in accordance with the determination of gross
				income for federal income tax liability. In the case of a tenant receiving
				housing assistance payments under section 8, the documentation requirement of
				this subdivision 7 is satisfied if the public housing authority provides a
				statement to the building owner declaring that the tenant's income does not
				exceed the applicable income limit under § 42(g) of the IRC.
8. The eligible basis and qualified basis of
				the building at the end of the first year of the credit period.
9. The character and use of the
				nonresidential portion of the building included in the building's eligible
				basis under § 42(d) of the IRC (e.g., tenant facilities that are available
				on a comparable basis to all tenants and for which no separate fee is charged
				for use of the facilities, or facilities reasonably required by the
				development).
The owner of a low-income housing development must retain the
				  records described in this subsection B for at least six years after the due
				  date (with extensions) for filing the federal income tax return for that year.
				  The records for the first year of the credit period, however, must be retained
				  for at least six years beyond the due date (with extensions) for filing the
				  federal income tax return for the last year of the compliance period of the
				  building.
In addition, the owner of a low-income housing development
				  must retain any original local health, safety, or building code violation
				  reports or notices issued by the Commonwealth or local government (as described
				  in subdivision C 6 of this section) for the authority's inspection. Retention
				  of the original violation reports or notices is not required once the authority
				  reviews the violation reports or notices and completes its inspection, unless
				  the violation remains uncorrected.