October 31, 2020

Volume X, Number 305

Advertisement

October 30, 2020

Subscribe to Latest Legal News and Analysis

October 29, 2020

Subscribe to Latest Legal News and Analysis

October 28, 2020

Subscribe to Latest Legal News and Analysis
Advertisement

IRS Releases a Revised Form 8703---Longer and More Detailed

On June 15, 2011, the IRS released a revised Form 8703 “Annual Certification of a Residential Rental Project.” The annual filing of this Form has been required since 1986 of operators of multi-family housing projects financed with tax-exempt bonds issued under Section 142(d) of the Internal Revenue Code of 1986, as amended.

The new version of Form 8703 is considerably more detailed than the prior version. Four new questions were added as a result of changes made by the Housing Assistance Tax Act of 2008 (commonly referred to as HERA). The new questions are designed for projects that are entirely low-income. Operators of these projects will no longer have to answer the questions requiring calculation of percentage of low-income occupancy. However, operators of projects that are not entirely low income will have to answer these new questions as well as the old questions. In addition, a section about the bonds used to finance the project was added so that the Information Return 8038 for the related bonds could be located and cross-checked more easily by the Internal Revenue Service.

Failure to file Form 8703 annually does not affect the tax-exemption of the related bond financing, but does subject the operator of the financed project to a monetary penalty ($100 per failure to file). Also, when a Section 142(d) bond issue financing a project is audited, one of the standard questions asks the project owner or operator to produce copies of filed 8703s. The failure to file can cause problems on audit because such failure can cause the IRS to raise questions about actual low income set aside compliance by the owner, which may, in turn, if the questions raised are not adequately answered, adversely affect the tax-exemption of the related bonds.

©2020 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume I, Number 174
Advertisement

TRENDING LEGAL ANALYSIS

Advertisement
Advertisement

About this Author

Vanessa Albert Lowry, Greenberg Traurig Law Firm, Philadelphia, Tax Law Attorney
Shareholder

Vanessa Albert Lowry focuses her practice on tax, public finance, and asset securitization matters, as well as investment and repurchase agreements.

Professional & Community Involvement

  • Member, American Bar Association, Section on Taxation

  • Member, National Association of Bond Lawyers

    • Vice-Chair, Committee on Taxation

  • Board Member of active community organization/urban church boards in...

215-988-7811
Advertisement
Advertisement