Form 8823 Low-Income Housing Credit Agencies Report of Noncomplian

8823

Form
(Rev. June 2011)
Department of the Treasury
Internal Revenue Service

1

Low-Income Housing Credit Agencies
Report of Noncompliance or Building Disposition

OMB No. 1545-1204

Check here if this is an
amended return ▶

Note: File a separate Form 8823 for each building that is disposed of or goes out of compliance.
IRS Use Only

Building name (if any). Check if item 1 differs from Form 8609 ▶
Street address
City or town, state, and ZIP code

2

Building identification number (BIN)

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Owner’s name. Check if item 3 differs from Form 8609 ▶
Street address
City or town, state, and ZIP code

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Owner’s taxpayer identification number

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Total credit allocated to this BIN

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7a
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If this building is part of a multiple building project, enter the number of buildings in the project .
Total number of residential units in this building . . . . . . . . . . . . . . .
Total number of low-income units in this building
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Total number of residential units in this building determined to have noncompliance issues . . . . . .
Total number of units reviewed by agency (see instructions) . . . . . . . . . . . . . . .
Date building ceased to comply with the low-income housing credit provisions (see instructions) (MMDDYYYY)

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Date noncompliance corrected (if applicable) (see instructions) (MMDDYYYY) . . . . . . . .
Check this box if you are filing only to show correction of a previously reported noncompliance problem

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a
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Check the box(es) that apply:
Household income above income limit upon initial occupancy . . . . . . . .
Owner failed to correctly complete or document tenant’s annual income recertification

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Violation(s) of the UPCS or local inspection standards (see instructions) (attach explanation) . .
Owner failed to provide annual certifications or provided incomplete or inaccurate certifications .
Changes in Eligible Basis or the Applicable Percentage (see instructions)
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Project failed to meet minimum set-aside requirement (20/50, 40/60 test) (see instructions)
Gross rent(s) exceed tax credit limits . . . . . . . . . . . . . . . .
Project not available to the general public (see instructions) (attach explanation)
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Violation(s) of the Available Unit Rule under section 42(g)(2)(D)(ii) . . . . . . . . . . . . .
Violation(s) of the Vacant Unit Rule under Reg. 1.42-5(c)(1)(ix) . . . . . . . . . . . . . .
Owner failed to execute and record extended-use agreement within time prescribed by section 42(h)(6)(J) .

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EIN
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SSN
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Low-income units occupied by nonqualified full-time students . . . .
m Owner did not properly calculate utility allowance . . . . . . .
n Owner has failed to respond to agency requests for monitoring reviews .
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Out of
compliance

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Low-income units used on a transient basis (attach explanation) . . . . . . . . . . .
Building is no longer in compliance nor participating in the section 42 program (attach explanation) .
Other noncompliance issues (attach explanation)
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Additional information for any item above. Attach explanation and check box . . .
Building disposition by
Sale
Foreclosure
Destruction
Date of disposition (MMDDYYYY)

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Other (attach explanation)

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Noncompliance
corrected

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d New owner’s taxpayer identification number

New owner’s name

EIN
Street address

14 Name of contact person

City or town, state, and ZIP code

15 Telephone number of contact person

SSN

Ext.
Under penalties of perjury, I declare that I have examined this report, including accompanying statements and schedules, and to the best of my knowledge and belief, it is
true, correct, and complete.
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For Paperwork Reduction Act Notice, see instructions.

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Signature of authorizing official

Print name and title
Cat. No. 12308D

Date (MMDDYYYY)

Form

8823 (Rev. 6-2011)

Version A, Cycle 4
Form 8823 (Rev. 6-2011)

General Instructions
Section references are to the Internal Revenue Code
unless otherwise noted.

What's New
The address used to file this form has changed. See
Where To File below for the new address.

Purpose of Form
Housing credit agencies use Form 8823 to fulfill their
responsibility under section 42(m)(1)(B)(iii) to notify the
IRS of noncompliance with the low-income housing tax
credit provisions or any building disposition.
The housing credit agency should also give a copy of
Form 8823 to the owner(s).

Who Must File
Any authorized housing credit agency that becomes
aware that a low-income housing building was disposed
of or is not in compliance with the provisions of section
42 must file Form 8823.

When To File
File Form 8823 no later than 45 days after (a) the
building was disposed of or (b) the end of the time
allowed the building owner to correct the condition(s)
that caused noncompliance. For details, see Regulations
section 1.42-5(e).

Where To File
File Form 8823 with the:
Department of the Treasury
Internal Revenue Service Center
Philadelphia, PA 19255-0549

Specific Instructions
Amended return. If you are filing an amended return to
correct previously reported information, check the box at
the top of page 1.
Item 2. Enter the building identification number (BIN)
assigned to the building by the housing credit agency as
shown on Form 8609.
Items 3, 4, 13b, and 13d. If there is more than one
owner (other than as a member of a pass-through entity),
attach a schedule listing the owners, their addresses, and
their taxpayer identification numbers. Indicate whether
each owner’s taxpayer identification number is an
employer identification number (EIN) or a social security
number (SSN).
Both the EIN and the SSN have nine digits. An EIN has
two digits, a hyphen, and seven digits. An SSN has three
digits, a hyphen, two digits, a hyphen, and four digits, and
is issued only to individuals.
Item 7d. “Reviewed by agency” includes physical
inspection of the property, tenant file inspection, or
review of documentation submitted by the owner.
Item 8. Enter the date that the building ceased to comply
with the low-income housing credit provisions.
If there are multiple noncompliance issues, enter the

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date for the earliest discovered issue. Do not complete
item 8 for a building disposition. Instead, skip items 9
through 12, and complete item 13.
Item 9. Enter the date that the noncompliance issue was
corrected. If there are multiple issues, enter the date the
last correction was made.
Item 10. Do not check this box unless the sole reason
for filing the form is to indicate that previously reported
noncompliance problems have been corrected.
Item 11c. Housing credit agencies must use either
(a) the local health, safety, and building codes (or other
habitability standards) or (b) the Uniform Physical
Conditions Standards (UPCS) (24 C.F.R. section 5.703)
to inspect the project, but not in combination. The UPCS
does not supersede or preempt local codes. Thus, if a
housing credit agency using the UPCS becomes aware
of any violation of local codes, the agency must report the
violation. Attach a statement describing either (a) the
deficiency and its severity under the UPCS, i.e., minor
(level 1), major (level 2), and severe (level 3) or (b) the
health, safety, or building violation under the local codes.
The Department of Housing and Urban Development’s
Real Estate Assessment Center has developed a
comprehensive description of the types and severities of
deficiencies entitled “Dictionary of Deficiency Definitions”
found at www.hud.gov. Under Regulations section
1.42-5(e)(3), report all deficiencies to the IRS whether or
not the noncompliance or failure to certify is corrected at
the time of inspection. In using the UPCS inspection
standards, report all deficiencies in the five major
inspectable areas (defined below) of the project: (1) Site;
(2) Building exterior; (3) Building systems; (4) Dwelling
units; and (5) Common areas.
1. Site. The site components, such as fencing and
retaining walls, grounds, lighting, mailboxes, signs (such
as those identifying the project or areas of the project),
parking lots/driveways, play areas and equipment, refuse
disposal equipment, roads, storm drainage, and
walkways, must be free of health and safety hazards and
be in good repair. The site must not be subject to material
adverse conditions, such as abandoned vehicles,
dangerous walkways or steps, poor drainage, septic tank
back-ups, sewer hazards, excess accumulation of
garbage and debris, vermin or rodent infestation, or fire
hazards.
2. Building exterior. Each building on the site must be
structurally sound, secure, habitable, and in good repair.
Each building’s doors, fire escapes, foundations,
lighting, roofs, walls, and windows, where applicable,
must be free of health and safety hazards, operable, and
in good repair.
3. Building systems. Each building’s domestic
water, electrical system, elevators, emergency power,
fire protection, HVAC, and sanitary system must be
free of health and safety hazards, functionally
adequate, operable, and in good repair.
4. Dwelling units. Each dwelling unit within a building
must be structurally sound, habitable, and in good repair.
All areas and aspects of the dwelling unit (for example,
the unit’s bathroom, call-for-aid (if applicable), ceilings,
doors, electrical systems, floors, hot water heater, HVAC

Version A, Cycle 4
Form 8823 (Rev. 6-2011)

(where individual units are provided), kitchen, lighting,
outlets/switches, patio/porch/balcony, smoke detectors,
stairs, walls, and windows) must be free of health and
safety hazards, functionally adequate, operable, and in
good repair. Where applicable, the dwelling unit must
have hot and cold running water, including an adequate
source of potable water (single room occupancy units
need not contain water facilities). If the dwelling unit
includes its own bathroom, it must be in proper operating
condition, usable in privacy, and adequate for personal
hygiene and the disposal of human waste. The dwelling
unit must include at least one battery-operated or
hard-wired smoke detector, in proper working condition,
on each level of the unit.
5. Common areas. The common areas must be
structurally sound, secure, and functionally adequate for
the purposes intended. The basement, garage/carport,
restrooms, closets, utility rooms, mechanical rooms,
community rooms, day care rooms, halls/corridors, stairs,
kitchens, laundry rooms, office, porch, patio, balcony,
and trash collection areas, if applicable, must be free of
health and safety hazards, operable, and in good repair.
All common area ceilings, doors, floors, HVAC, lighting,
outlets/switches, smoke detectors, stairs, walls, and
windows, to the extent applicable, must be free of health
and safety hazards, operable, and in good repair.
Health and Safety Hazards. All areas and components
of the housing must be free of health and safety hazards.
These include, but are not limited to: air quality, electrical
hazards, elevators, emergency/fire exits, flammable
materials, garbage and debris, handrail hazards,
infestation, and lead-based paint. For example, the
buildings must have fire exits that are not blocked and
have hand rails that are not damaged, loose, missing
portions, or otherwise unusable. The housing must have
no evidence of infestation by rats, mice, or other vermin.
The housing must have no evidence of electrical hazards,
natural hazards, or fire hazards. The dwelling units and
common areas must have proper ventilation and be free
of mold as well as odor (e.g., propane, natural, sewer, or
methane gas). The housing must comply with all
requirements related to the evaluation and reduction of
lead-based paint hazards and have available proper
certifications of such (see 24 C.F.R. part 35).
Project owners must promptly correct exigent and
fire safety hazards. Before leaving the project, the
inspector should provide the project owner with a list
of all observed exigent and fire safety hazards. Exigent
health and safety hazards include: air quality problems
such as propane, natural gas, or methane gas
detected; electrical hazards such as exposed wires or
open panels and water leaks on or near electrical
equipment; emergency equipment, fire exits, and fire
escapes that are blocked or not usable; and carbon
monoxide hazards such as gas or hot water heaters with
missing or misaligned chimneys. Fire safety hazards
include missing or inoperative smoke detectors (including
missing batteries), expired fire extinguishers, and window
security bars preventing egress from a unit.
Item 11d. Report the failure to provide annual
certifications or the provision of certifications that are
known to be incomplete or inaccurate as required by

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Regulations section 1.42-5(c). As examples, report a
failure by the owner to include a statement summarizing
violations (or copies of the violation reports) of local
health, safety, or building codes; report an owner who
provided inaccurate or incomplete statements concerning
corrections of these violations.
Item 11e. For buildings placed in service before July 31,
2008, report any federal grant made with respect to any
building or the operation thereof during any tax year in the
compliance period. For buildings placed in service after
July 30, 2008, report any federal grant used to finance
any costs that were included in the eligible basis of any
building. Report changes in common areas which
become commercial, when fees are charged for facilities,
etc. In addition, for buildings placed in service before July
31, 2008, report any below market federal loan or any
obligation the interest on which is exempt from tax under
section 103 that is or was used (directly or indirectly) with
respect to the building or its operation during the
compliance period and that was not taken into account
when determining eligible basis at the close of the first
year of the credit period. For buildings placed in service
after July 30, 2008, report any obligation the interest on
which is exempt from tax under section 103 that is or was
used (directly or indirectly) with respect to the building or
its operation during the compliance period and that was
not taken into account when determining eligible basis at
the close of the first year of the credit period.
Item 11f. Failure to satisfy the minimum set-aside
requirement for the first year of the credit period results in
the permanent loss of the entire credit.
Failure to maintain the minimum set-aside requirement
for any year after the first year of the credit period results
in recapture of previously claimed credit and no
allowable credit for that tax year. No low-income housing
credit is allowable until the minimum set-aside is restored
for a subsequent tax year.
Item 11h. All units in the building must be for use by
the general public (as defined in Regulations section
1.42-9 and further clarified in section 42(g)(9)),
including the requirement that no finding of
discrimination under the Fair Housing Act occurred for
the building. Low-income housing credit properties are
subject to Title VIII of the Civil Rights Act of 1968, also
known as the Fair Housing Act. The Act prohibits
discrimination in the sale, rental, and financing of
dwellings based on race, color, religion, sex, national
origin, familial status, and disability. See 42 U.S.C.A.
sections 3601 through 3619.
It also mandates specific design and construction
requirements for multifamily housing built for first
occupancy after March 13, 1991, in order to provide
accessible housing for individuals with disabilities. The
failure of low-income housing credit properties to comply
with the requirements of the Fair Housing Act will result in
the denial of the low-income housing tax credit on a
per-unit basis.
Individuals with questions about the accessibility
requirements can obtain the Fair Housing Act Design
Manual through www.huduser.org.

Version A, Cycle 4
Form 8823 (Rev. 6-2011)

Item 11i. The owner must rent to low-income tenants all
comparable units that are available or that subsequently
become available in the same building in order to
continue treating the over-income unit(s) as a low-income
unit. All units affected by a violation of the available unit
rule may not be included in qualified basis. When the
percentage of low-income units in a building again equals
the percentage of low-income units on which the credit is
based, the full availability of the credit is restored. Thus,
only check the “Noncompliance corrected” box when the
percentage of low-income units in the building equals the
percentage on which the credit is based.
Item 11q. Check this box for noncompliance events
other than those listed in 11a through 11p. Attach an
explanation. For projects with allocations from the
nonprofit set-aside under section 42(h)(5), report the lack
of material participation by a non-profit organization (i.e.,
regular, continuous, and substantial involvement) that the
housing credit agency learns of during the compliance
period.

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Paperwork Reduction Act Notice. We ask for the
information on this form to carry out the Internal Revenue
laws of the United States. You are required to give us the
information. We need it to ensure that you are complying
with these laws and to allow us to figure and collect the
right amount of tax.
You are not required to provide the information
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may become material in the administration of any Internal
Revenue law. Generally, tax returns and return
information are confidential, as required by section 6103.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
average time is:
Recordkeeping . . . . . . . . . . 11 hr., 43 min.
Learning about the law
or the form . . . . . . . . . . . 1 hr., 35 min.
Preparing and sending
the form to the IRS . . . . . . . . 1 hr., 51 min.
If you have comments concerning the accuracy of
these time estimates or suggestions for making this form
simpler, we would be happy to hear from you. You can
write to the Tax Products Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW,
IR-6526, Washington, DC 20224. Do not send Form 8823
to this address. Instead, see Where To File on page 2.