On April 2, 2020 a letter was sent to the IRS and Treasury asking for COVID-19 relief for tax credit projects, including a 1 year extension on numerous deadlines for such projects. The letter was prepared by members of the leadership of the Tax Credit and Equity Financing Committee of the American Bar Association's Forum on Affordable Housing and Community Development Law, including Glenn Graff of Applegate & Thorne-Thomsen. The IRS was very receptive to getting a letter from the Committee's members and it is hoped that the letter will be helpful in moving things along.
Below is the overview portion of the letter, please click HERE to view the entire letter.
Throughout the country, governmental entities are recommending social distancing and, in many cases, enforcing stay-at-home orders that exempt only essential workers. In addition, some exempt workers are unable to work due to family responsibilities or potential or actual exposure to COVID-19. As a result, there are shortages of construction materials and workers, delays in permitting and local approvals, delays in public hearings and meetings of bond issuers, difficulties in conducting due diligence activities including site visits, surveys and environmental studies, inefficiencies in preparing legal documents and recording deeds and mortgages, and interruptions in daily operations of properties, including the ability to interact with residents and arrange maintenance and repair activities.
Transactions that should be closing right now are beginning to be delayed because of the uncertainty that technical requirements of Section 42 and the regulations thereunder may not be met given the disruptions due to the COVID-19 pandemic. In addition, for projects which had planned on beginning construction later this year or even next year, it may be difficult to meet all the timing requirement of Section 42 due to COVID-19 related disruptions and delays. Efforts of property managers that should be focused exclusively on the health and safety of tenants and staff are at risk of being diverted to satisfy technical requirements of the program.
Accordingly, the Forum of Affordable Housing and Community Development Law submits this request for relief from certain of the technical requirements applicable to LIHTC projects.
Click HERE to download the entire Letter to IRS Regarding COVID-19 Tax Relief for Tax Credit Projects. For more information, please contact Glenn Graff or any of your contacts at Applegate & Thorne-Thomsen.