Election Involving the Repeal of the Bonding Requirement under § 42(j)(6)

facilities, marine and hydrokinetic renewable energy, section 45(b)(4)(A) requires
the amount in effect under section 45(a)(1)
(before rounding to the nearest 0.1 cent)
to be reduced by one-half. Under the calculation required by section 45(b)(2), the
credit for renewable electricity production
for calendar year 2012 under section 45(a)
is 2.2 cents per kilowatt hour on the sale
of electricity produced from the qualified
energy resources of wind, closed-loop
biomass, geothermal energy, and solar energy, and 1.1 cent per kilowatt hour on the
sale of electricity produced in open-loop
biomass facilities, small irrigation power
facilities, landfill gas facilities, trash combustion facilities, qualified hydropower
facilities, marine and hydrokinetic energy
facilities. Under the calculation required
by section 45(b)(2), the credit for refined
coal production for calendar year 2012 under section 45(e)(8)(A) is $6.475 per ton
on the sale of qualified refined coal. The
credit for Indian coal production for calendar year 2012 under section 45(e)(10)(B)
is $2.267 per ton on the sale of Indian coal.
DRAFTING AND CONTACT
INFORMATION
The principal author of this notice
is Philip Tiegerman of the Office of
Associate Chief Counsel (Passthroughs
and Special Industries).
For further
information regarding this notice, contact
Mr. Tiegerman at (202) 622–3110 (not a
toll-free call).

26 CFR 601.105: Examination of returns and claims
for refund, credit, or abatement; determination of
correct tax liability.
(Also Part I, § 42.)

Rev. Proc. 2012–27
SECTION 1. PURPOSE
This revenue procedure provides the
manner under § 42(j)(6)(B)(i) of the Internal Revenue Code (the Code) by which a
taxpayer may notify the Internal Revenue
Service of any increase in tax resulting
from a reduction in the qualified basis of a
low-income housing tax credit building in
order to begin the 3-year statutory period
for assessing a deficiency with respect to
that taxpayer.

May 21, 2012

SECTION 2. BACKGROUND
.01 Section 42 of the Code allows
a 10-year tax credit for investment in
qualified low-income buildings placed in
service after December 31, 1986. If, as
of the close of any taxable year in the
15-year compliance period (defined under
§ 42(i)(1) of the Code), the amount of the
qualified basis of any building with respect
to the taxpayer is less than the amount of
such basis as of the close of the preceding
taxable year, § 42(j)(1) provides that the
taxpayer’s tax for the taxable year shall be
increased by the credit recapture amount.
.02 Section 42(j)(6)(A) of the Code, as
amended by section 3004(c) of the Housing Assistance Tax Act of 2008 (Pub. L.
110–289) (the Act), provides that, in general, an increase in tax under § 42(j) shall
not apply solely by reason of a disposition of a building (or an interest therein) if
it is reasonably expected that such building will continue to be operated as a qualified low-income building for the remaining compliance period with respect to such
building. A building’s compliance period
is defined in § 42(i)(1).
.03 Section 42(j)(6)(B) of the Code, as
amended by section 3004(c) of the Act,
provides that if a building (or interest
therein) is disposed of during any taxable
year and there is any reduction in the qualified basis of such building which results
in an increase in tax for such taxable or
any subsequent taxable year, then (i) the
statutory period for the assessment of any
deficiency with respect to such increase in
tax shall not expire before the expiration
of 3 years from the date the Secretary is
notified by the taxpayer (in such manner
as the Secretary may prescribe) of such
reduction in qualified basis, and (ii) such
deficiency may be assessed before the
expiration of such 3-year period notwithstanding the provisions of any other law or
rule of law which would otherwise prevent
such assessment.
.04 Under section 3004(i) of the Act,
the amendments made to § 42(j)(6) of
the Code by section 3004(c) of the Act
apply to buildings (or interests therein)
disposed of after July 30, 2008, the date
of enactment of the Act. In addition, the
amendments apply to buildings (or interests therein) disposed of on or before
July 30, 2008, if (i) it is reasonably expected that such building(s) will continue

940

to be operated as qualified low-income
building(s) (within the meaning of § 42)
for the remainder of the compliance period with respect to such building(s), and
(ii) the taxpayer elects the application of
these rules to such disposition. Rev. Proc.
2008–60, 2008–2 C.B. 1006, provides
taxpayers with the procedures for making
the election to apply these rules to dispositions of buildings (or interests therein) on
or before July 30, 2008.
SECTION 3. SCOPE
This revenue procedure applies to taxpayers that—
.01 Dispose of a low-income housing
building (or interest therein) in a transaction to which the amendments made by
section 3004(c) of the Act apply; and
.02 Seek to make the notification prescribed by § 42(j)(6)(B)(i) of the Code.
SECTION 4. NOTIFICATION
PROCEDURES
.01 To make the notification prescribed
by § 42(j)(6)(B)(i) of the Code a taxpayer
that disposed of a low-income building (or
interest therein) must submit a letter to the
Internal Revenue Service, signed by the
taxpayer, containing the following:
(1) A lead-in declaration stating: “By
this letter I am making the notification prescribed by § 42(j)(6)(B)(i) of the Internal
Revenue Code.”;
(2) The taxpayer’s name, address, and
taxpayer identification number;
(3) The name (if any), address, and
Building Identification Number of each
building to which the taxpayer’s disposition relates. If a taxpayer received a
credit from a pass-through entity but does
not know the information required by the
preceding sentence, the taxpayer must provide the name and employer identification
number of the pass-through entity from
which the taxpayer received the credit;
(4) To the extent known, the name, address, and taxpayer identification number
of any person(s) to whom the increase in
tax under § 42(j)(6)(B) applies as a result
of a reduction in the qualified basis of any
building to which the taxpayer’s disposition relates; and
(5) A concluding declaration stating:
“Under penalties of perjury, I declare that I
have examined this letter and the represen-

2012–21 I.R.B.

tations made therein, and to the best of my
knowledge and belief, they are true, correct, and complete.”
.02 The taxpayer must mail the letter to
the address where the most current Form
8609, Low-Income Housing Credit Allocation and Certification, would be filed.
For purposes of determining the 3-year
period described in § 42(j)(6)(B)(i), the
Secretary is deemed to be notified as of the
postmark date of the letter. The instructions to Form 8609 contain the address
for filing the most current Form 8609
and may be accessed electronically at:
http://www.irs.gov/app/picklist/list/formslnstructions.html.
SECTION 5. EFFECTIVE DATE
.01 This revenue procedure is effective
for notifications under § 42(j)(6)(B)(i) of
the Code made on or after May 2, 2012.
.02 Except to the extent provided
in section 5.03 of this revenue procedure, a notification sent by a taxpayer
to the Internal Revenue Service prior to
May 2, 2012, is not effective to begin
the 3-year statutory period for assessing
a deficiency with respect to that taxpayer
under § 42(j)(6)(B)(i).
.03 A notification received from a
taxpayer by the Internal Revenue Ser-

2012–21 I.R.B.

vice prior to May 2, 2012, is effective
to begin the 3-year statutory period
if it complies with the substance of
this revenue procedure. A notification
complies with the substance of this
revenue procedure only if it provides the
information described in section 4.01(2)
and (3) of this revenue procedure, and
it contains a declaration under penalties
of perjury substantially similar to that
described in section 4.05 of this revenue
procedure.
SECTION 6. PAPERWORK
REDUCTION ACT
The collection of information contained in this revenue procedure has been
reviewed and approved by the Office
of Management and Budget in accordance with the Paperwork Reduction Act
(44 U.S.C. 3507) under control number
1545–2120.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The reporting requirement is contained
in section 4 of this revenue procedure. The
information is required so that taxpayers
may notify the Service of any increase in

941

tax resulting from a reduction in the qualified basis of a low-income housing tax
credit building in order to begin the 3-year
statutory period for assessing a deficiency
with respect to that taxpayer pursuant to
§ 42(j)(6)(B)(i) of the Code.
The likely respondents are taxpayers
that have disposed of a low-income building (or interest therein). The estimated total annual reporting burden is 10 hours.
The estimated annual burden per respondent is 1 hour, depending on the individual
circumstances. The estimated total number of respondents is 10.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally tax returns and tax return
information are confidential, as required
by 26 U.S.C. 6103.
SECTION 7. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Julie Hanlon-Bolton of
the Office of Associate Chief Counsel
(Passthroughs and Special Industries). For
further information regarding this revenue
procedure, contact Ms. Hanlon-Bolton at
(202) 622–3040 (not a toll-free call).

May 21, 2012