Section 42; Low-Income Housing Credit

Internal Revenue Service Department of the Treasury
Washington, DC 20224
Number: 202536003
Release Date: 9/5/2025
Index Number: 42.00-00, 9100.01-00
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In Re:
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Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
---, ID No. ---
Telephone Number:
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Refer Reply To:
CC:ECE:B01
PLR-102068-25
Date:
June 02, 2025
LEGEND
Taxpayer = ---
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Dear ---:
This letter responds to Taxpayer’s authorized representative’s letter dated
January 31, 2025, and subsequent correspondence, submitted on behalf of Taxpayer, requesting an extension of time, pursuant to §§ 301.9100-1 and 301.9100-3 of the Procedure and Administration Regulations, to make an election under § 42(g)(1) of the Internal Revenue Code (Code).
According to the information submitted and representations made, Taxpayer, a partnership for federal income tax purposes, owns and operates a multi-building, low-income residential multi-family housing project (Project) located in State. The building identification numbers of the buildings in the Project are BIN 1, BIN 2, and PLR-102068-25 2 BIN 3. Taxpayer placed the buildings identified by BIN 1 and BIN 2 in service in Year 1 and the building identified by BIN 3 in service in Year 2.
Taxpayer intended, as evidenced by Taxpayer’s contemporaneous documents, to make a 20-50 minimum set-aside election under § 42(g)(1)(A) for each building in the Project. However, on the Forms 8609 that Taxpayer submitted to the Internal Revenue Service (IRS), Taxpayer inadvertently failed to make such election.
Section 42(g)(1) defines the term “qualified low-income housing project” as any project for residential rental property if the project meets the requirements of § 42(g)(1)(A), (B), or (C), whichever is elected by the taxpayer. The project meets the requirements of § 42(g)(1)(A) if 20 percent or more of the residential units in the project are both rent-restricted and occupied by individuals whose income is 50 percent or less of area median gross income. The project meets the requirements of § 42(g)(1)(B) if 40 percent or more of the residential units in the project are both rent-restricted and occupied by individuals whose income is 60 percent or less of area median gross income. The project generally meets the requirements of § 42(g)(1)(C) if 40 percent or more (25 percent or more in the case of a project described in § 142(d)(6)) of the residential units in the project are both rent-restricted and occupied by individuals whose income does not exceed the imputed income limitation designated by the taxpayer with respect to the respective unit. Any election under § 42(g)(1), once made, is irrevocable.
Section 42(l)(1) describes the requisite certifications for any qualified low-income building following the close of the first taxable year in the credit period (first-year certifications). In particular, § 42(l)(1)(D) provides that, following the close of the first taxable year in the credit period for any qualified low-income building, the taxpayer must certify to the Secretary (at the time and in the form and the manner as the Secretary prescribes) the election made under § 42(g) with respect to the qualified low-income housing project of which the building is a part. In the case of a failure to make the required certification on the date prescribed for it, unless it is shown that the failure is due to reasonable cause and not to willful neglect, no credit is to be allowed by reason of § 42(a) for the building for any taxable year ending before the certification is made.
Section 301.9100-7T(b) of the temporary Procedure and Administration
Regulations provides, in part, that the election under § 42(g)(1) is to be made in the certification required to be filed pursuant to § 42(l)(1).
Section 1.42-1(h) of the Income Tax Regulations provides, in part, that, unless otherwise provided in forms or instructions, a completed Form 8609 (or any successor form), which contains the first-year certifications, must be filed by the building owner with the IRS. The requirements for completing and filing Form 8609 are addressed in the instructions to the form. The instructions to Form 8609 provide, in relevant part, that a building owner must make a one-time submission of the original Form 8609 to the Low-Income Housing Credit (LIHC) Unit at the IRS Philadelphia campus no later than PLR-102068-25 3 the due date (including extensions) of the first tax return with which the building owner is filing Form 8609-A, Annual Statement for Low-Income Housing Credit.
Sections 301.9100-1 through 301.9100-3 provide the standards the
Commissioner will use to determine whether to grant an extension of time to make an election.
Section 301.9100-1(b) defines the term “regulatory election” as including an election whose due date is prescribed by a regulation published in the Federal Register or a revenue ruling, revenue procedure, notice, or announcement published in the Internal Revenue Bulletin.
Under § 301.9100-1(c), the Commissioner has discretion to grant a reasonable extension of time under the rules set forth in §§ 301.9100-2 and 301.9100-3 to make a regulatory election, or a statutory election (but no more than six months except in the case of a taxpayer who is abroad), under all subtitles of the Code, except E, G, H, and I.
Section 301.9100-2 provides automatic extensions of time for making certain elections. Section 301.9100-3 provides extensions of time for making elections that do not meet the requirements of § 301.9100-2.
Requests for relief under § 301.9100-3(a) will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good faith, and that granting relief will not prejudice the interests of the government.
In the instant case, based solely on the facts submitted and the representations made, we conclude that the requirements of §§ 301.9100-1 and 301.9100-3 have been met. Accordingly, Taxpayer is granted an extension of time to make the election under § 42(g)(1)(A) for each building in the Project by filing within 120 days from the date of this letter amended Forms 8609 that include the intended election. The amended Forms 8609 (along with a copy of this letter) must be filed with the LIHC Unit at the following address provided in the instructions to Form 8609.
Department of the Treasury
Internal Revenue Service Center
Philadelphia, PA 19255-0549
A copy of this letter is enclosed for each of the buildings in the Project for this purpose.
Except as specifically set forth above, we express or imply no opinion concerning the federal tax consequences of the facts described above under any provisions of the Code or regulations. In particular, we express or imply no opinion on whether the Forms 8609 for the Project were timely or correctly filed for purposes other than the intended election under § 42(g)(1), or whether the Project is a qualified low-income housing PLR-102068-25 4 project and the buildings in the Project qualify for the low-income housing credit under § 42.
This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of the
Code provides that it may not be used or cited as precedent.
The ruling contained in this letter is based upon information submitted and representations made by Taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. While this office has not verified any of the material submitted in support of the request for ruling, it is subject to verification on examination.
In accordance with the Power of Attorney on file with this office, we are sending a copy of this letter to Taxpayer’s authorized representative.
Sincerely,
Associate Chief Counsel
(Energy, Credits, and Excise Tax)
By: ____
James W. Rider II
Senior Counsel, Branch 1
Office of Associate Chief Counsel
(Energy, Credits, and Excise Tax)
Enclosure:
Copy of this letter for § 6110 purposes cc: ---
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