[Federal Register Volume 87, Number 196 (Wednesday, October 12, 2022)]
[Proposed Rules]
[Pages 61543-61544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22100]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 87, No. 196 / Wednesday, October 12, 2022 / 
Proposed Rules  

[[Page 61543]]



DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-113068-22]
RIN 1545-BQ47


Section 42, Low-Income Housing Credit Average Income Test 
Regulations

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: This document contains proposed regulations concerning 
recordkeeping and reporting requirements for the average income test 
for purposes of the low-income housing credit. If a building is part of 
a residential rental project that satisfies this test, the building may 
be eligible to earn low-income housing credits. These proposed 
regulations affect owners of low-income housing projects and State or 
local housing credit agencies that monitor compliance with the 
requirements for low-income housing credits. In the Rules and 
Regulations section of this issue of the Federal Register, the IRS is 
issuing temporary regulations concerning the recordkeeping and 
reporting requirements for the average income test. The text of the 
temporary regulations also serves as the text of these proposed 
regulations.

DATES: Written (including electronic) comments must be received by 
December 12, 2022.

ADDRESSES: Commenters are strongly encouraged to submit public comments 
electronically. Submit electronic submissions via the Federal 
eRulemaking Portal at www.regulations.gov (indicate IRS and REG-113068-
22) by following the online instructions for submitting comments. Once 
submitted to the Federal eRulemaking Portal, comments cannot be edited 
or withdrawn. The Department of the Treasury (Treasury Department) and 
the IRS will publish for public availability any comment submitted 
electronically, and on paper, to its public docket.

FOR FURTHER INFORMATION CONTACT: Concerning these proposed regulations, 
Dillon Taylor at (202) 317-4137; concerning submissions of comments, 
Regina L. Johnson at (202) 317-6901 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register add Sec.  1.42-19T to the temporary 
Income Tax Regulations (26 CFR part 1) that relate to the average 
income test under section 42 of the Internal Revenue Code. These new 
temporary regulations set forth certain recordkeeping and reporting 
requirements that relate to the rules in Sec.  1.42-19. The text of the 
temporary regulations also serves as the text of these proposed 
regulations. The preamble to the temporary regulations explains the 
amendments. These proposed regulations would integrate the text of the 
temporary regulations into portions of Sec.  1.42-19 that are currently 
reserved.

Special Analyses

    These proposed regulations are not subject to review under section 
6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement 
(April 11, 2018) between the Department of the Treasury and the Office 
of Management and Budget regarding review of tax regulations.
    Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it 
is hereby certified that these proposed regulations will not have a 
significant economic impact on a substantial number of small entities. 
The basis for this certification can be found in the Special Analyses 
section of the temporary regulations.
    Pursuant to section 7805(f) of the Internal Revenue Code, these 
proposed regulations will be submitted to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on their 
impact on small business.

Comments and a Request for Public Hearing

    Before these proposed amendments to the regulations are adopted as 
final regulations, consideration will be given to comments that are 
submitted timely to the IRS as prescribed in the preamble under the 
ADDRESSES section. The Treasury Department and the IRS request comments 
on all aspects of the proposed regulations. Any electronic comments 
submitted, and any paper comments submitted, will be made available at 
www.regulations.gov or upon request.
    A public hearing will be scheduled if requested in writing by any 
person who timely submits electronic or written comments. Requests for 
a public hearing are also encouraged to be made electronically. If a 
public hearing is scheduled, notice of the date and time for the public 
hearing will be published in the Federal Register. Announcement 2020-4, 
2020-17 IRB 1, provides that until further notice, public hearings 
conducted by the IRS will be held telephonically. Any telephonic 
hearing will be made accessible to people with disabilities.

Drafting Information

    The principal author of these proposed regulations is Dillon 
Taylor, Office of 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.

Proposed Amendments to the Regulations

    Accordingly, the Treasury Department and the IRS propose to amend 
26 CFR part 1 as follows:

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 1.42-19 also issued under 26 U.S.C. 42(n);
* * * * *
0
Par. 2. Section 1.42-19 is amended by adding paragraphs (c)(1) and (2), 
(c)(3)(iv), (c)(4), and (d)(2) and revising paragraph (f) to read as 
follows:


Sec.  1.42-19  Average income test.

* * * * *
    (c) * * *

[[Page 61544]]

    (1) [The text of proposed Sec.  1.42-19(c)(1) is the same as the 
text of Sec.  1.42-19T(c)(1) in the final and temporary rule published 
elsewhere in this issue of the Federal Register].
    (2) [The text of proposed Sec.  1.42-19(c)(2) is the same as the 
text of Sec.  1.42-19T(c)(2) in the final and temporary rule published 
elsewhere in this issue of the Federal Register].
    (3) * * *
    (iv) [The text of proposed Sec.  1.42-19(c)(3)(iv) is the same as 
the text of Sec.  1.42-19T(c)(3)(iv) in the final and temporary rule 
published elsewhere in this issue of the Federal Register].
    (4) [The text of proposed Sec.  1.42-19(c)(4) is the same as the 
text of Sec.  1.42-19T(c)(4) in the final and temporary rule published 
elsewhere in this issue of the Federal Register].
    (d) * * *
    (2) [The text of proposed Sec.  1.42-19(d)(2) is the same as the 
text of Sec.  1.42-19T(d)(2) in the final and temporary rule published 
elsewhere in this issue of the Federal Register].
* * * * *
    (f) [The text of proposed Sec.  1.42-19(f) is the same as the text 
of Sec.  1.42-19T(f) in the final and temporary rule published 
elsewhere in this issue of the Federal Register].

Douglas W. O'Donnell,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2022-22100 Filed 10-7-22; 11:15 am]
BILLING CODE 4830-01-P