WASHINGTON, D.C. – July 29, 2015 – (RealEstateRama) — The Government Accountability Office (GAO) released a report on July 23 recommending that HUD and the Internal Revenue Service (IRS) jointly oversee the Low-Income Housing Tax Credit (LIHTC) program. The recommendation came as GAO criticized the IRS’ lack of oversight of the program. This includes the fact that the IRS has only conducted seven audits of the 56 state housing finances agencies that administer the program.
As a steering committee member of the Affordable Rental Housing (ACTION) coalition, NMHC joined other members to oppose GAO’s recommendation. In a July 24 letter to key congressional stakeholders, the Coalition said: “HUD has no experience in administering the Housing Credit program and little capacity to take on this responsibility. If necessary, the common sense solution would be to provide more resources to the IRS to increase oversight.”
Importantly, the GAO found no problems with the LIHTC. The agency also acknowledged the private sector’s role in assuring properties are suitable for occupancy and rented to qualified families. In addition, the Treasury Department believes that the responsibility for interpreting and enforcing the provisions of the Tax Code should remain entirely with the IRS. But Treasury is supporting research and analysis by HUD on the program’s effectiveness.
For its part, HUD is in favor of increased interagency coordination on LIHTC and pointed out that it needs additional resources for related research.
The GAO’s recommendation is unlikely to gain traction on Capitol Hill. That’s because lawmakers are more focused on other associated priorities right now like extension of the minimum 9 percent LIHTC.