Low-Income Housing Tax Credit: GAO Concerns on Noncompliance Reporting and Data Collection
A recent Governmental Accountability Office (GAO) report on oversight of LIHTC found that some state allocating agency practices raise concerns and that the IRS could improve noncompliance reporting and data collection.
Although the May 2016 report found that allocating agencies generally have processes to meet requirements for allocating credits, reviewing costs, and monitoring projects, some of these practices raised concerns.
In a July 2015 report, GAO found that Internal Revenue Service (IRS) oversight of allocating agencies was minimal and recommended joint administration with HUD to more efficiently address oversight challenges. GAO’s work for this review continues to show that IRS oversight remains minimal (particularly in reviewing allocation plans and practices for awarding discretionary basis boosts) and that action is still warranted to address GAO’s prior recommendation.
The GAO recommends that IRS clarify when agencies should report noncompliance and participate in the Rental Policy Working Group to assess the use of HUD’s database to strengthen IRS oversight. IRS agreed it should improve its noncompliance data, but also stated that it had to consider resource constraints.