[Federal Register Volume 69, Number 17 (Tuesday, January 27, 2004)]
[Rules and Regulations]
[Pages 3826-3827]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-1580]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9112]
RIN 1545-BC90


Low-Income Housing Credit Allocation Certification; Electronic 
Filing

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

-----------------------------------------------------------------------

SUMMARY: This document contains regulations that facilitate the 
electronic filing of Form 8609, ``Low-Income Housing Credit Allocation 
Certification.'' The regulations affect taxpayers who file Form 8609.

DATES: Effective Date: These regulations are effective January 27, 
2004.
    Date of Applicability: For date of applicability, see Sec. 1.42-
1(j).

FOR FURTHER INFORMATION CONTACT: Paul F. Handleman, (202) 622-3040 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    In 1998, Congress enacted the Internal Revenue Service 
Restructuring and Reform Act of 1998 (RRA 1998), Public Law 105-206 
(112 Stat. 685) (1998). Section 2001(a) of RRA 1998 states that the 
policy of Congress is that paperless filing should be the preferred and 
most convenient means of filing Federal tax returns. Section 2001(a) of 
RRA 1998 also sets a long-range goal for the IRS to have at least 80 
percent of all Federal tax returns filed electronically by 2007. 
Section 2001(b) of RRA 1998 requires the IRS to establish a 10-year 
strategic plan to eliminate barriers to electronic filing.
    The IRS has identified Sec. 1.42-1T(e)(1) and (h)(2) as regulatory 
provisions that impede electronic filing of Form 8609, ``Low-Income 
Housing Credit Allocation Certification,'' by requiring a taxpayer to 
include a third-party signature from an authorized State or local 
housing credit agency (Agency) official when filing the form. This 
Treasury decision eliminates that requirement.

Explanation of Provisions

    Section 42 provides for a low-income housing credit that may be 
claimed as part of the general business credit under section 38. In 
general, the credit is allowable only if the owner of a qualified low-
income building receives a housing credit allocation from an Agency of 
the jurisdiction where the building is located.
    Section 1.42-1T(d)(8)(ii) provides that housing credit allocations 
are deemed made when Part I of Form 8609 is completed and signed by an 
authorized Agency official and mailed to the owner of the qualified 
low-income building. Under Sec. 1.42-1T(e)(1), an owner is required to 
complete the Form 8609 on which the Agency made the applicable housing 
credit allocation and submit a copy of it with the owner's Federal 
income tax return for each year in the compliance period. Under Sec. 
1.42-1T(h)(2), the owner is required to file a completed Form 8609 (or 
copy thereof) with the owner's Federal income tax return for each of 
the 15 taxable years in the compliance period. Section 1.42-1T(h)(2) 
also provides other rules for completing Form 8609.
    This Treasury decision facilitates the electronic filing of Federal 
tax returns by eliminating the requirements in Sec. 1.42-1T(e)(1) and 
(h)(2) that an owner file a copy of the completed Form 8609 that is 
signed by the authorized Agency official with the owner's Federal 
income tax return for each of the 15 taxable years in the compliance 
period. Notwithstanding that the owner need not file a copy of the Form 
8609 signed by the Agency official, the building owner must continue to 
retain that form for 3 years after the due date, including extensions, 
of the building owner's tax return for the tax year that includes the 
end of the 15-year compliance period. The other rules in Sec. 1.42-
1T(h)(2) for completing Form 8609 are also deleted. The requirements 
for completing and filing Form 8609 are addressed in the instructions 
to the form.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866. 
Therefore, a regulatory assessment is not required. It also has been 
determined that section 553(b) and (d) of the Administrative Procedure 
Act (5 U.S.C. chapter 5) does not apply to these regulations. Because 
no notice of proposed rulemaking is required, the Regulatory 
Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to 
section 7805(f) of the Internal Revenue Code, these regulations were 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on their impact on small business.

Drafting Information

    The principal author of these regulations is Paul F. Handleman, 
Office of the Associate Chief Counsel (Passthroughs and Special 
Industries), IRS. However, other personnel from the IRS and Treasury 
Department participated in their development.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

0
Accordingly, 26 CFR part 1 is amended as follows:

[[Page 3827]]

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 1.42-1 also issued under 26 U.S.C. 42(n); * * *

0
Par. 2. Section 1.42-1 is added to read as follows:


Sec. 1.42-1  Limitation on low-income housing credit allowed with 
respect to qualified low-income buildings receiving housing credit 
allocations from a State or local housing credit agency.

    (a) through (g) [Reserved]. For further guidance, see Sec. 1.42-
1T(a) through (g).
    (h) Filing of forms. A completed Form 8586, ``Low-Income Housing 
Credit,'' must be filed with the owner's Federal income tax return for 
each taxable year the owner of a qualified low-income building is 
claiming the low-income housing credit under section 42(a). A completed 
Form 8609, ``Low-Income Housing Credit Allocation Certification,'' must 
be filed with the owner's Federal income tax return for each of the 15 
taxable years of the compliance period. Failure to comply with the 
requirement of the preceding sentence for any taxable year after the 
first taxable year in the credit period will be treated as a 
mathematical or clerical error for purposes of section 6213(b)(1) and 
(g)(2).
    (i) [Reserved]. For further guidance, see Sec. 1.42-1T(i).
    (j) Effective date. Section 1.42-1(h) applies to forms filed on or 
after January 27, 2004. The rule that applies for forms filed before 
January 27, 2004 is contained in Sec. 1.42-1T(h) in effect before 
January 27, 2004 (see 26 CFR part 1 revised as of April 1, 2003).

0
Par. 3. Section 1.42-1T is amended by:
0
1. Removing the last two sentences in paragraph (e)(1).
0
2. Revising paragraph (h).
0
The revision reads as follows:


Sec. 1.42-1T  Limitation on low-income housing credit allowed with 
respect to qualified low-income buildings receiving housing credit 
allocations from a State or local housing credit agency (temporary).

* * * * *
    (h) Filing of forms. For further guidance, see Sec. 1.42-1(h).
* * * * *

    Approved: January 19, 2004.
Mark E. Mathews,
Deputy Commissioner for Services and Enforcement.
Pamela F. Olson,
Assistant Secretary of the Treasury.
[FR Doc. 04-1580 Filed 1-26-04; 8:45 am]
BILLING CODE 4830-01-P