Form 8823 Low-Income Housing Credit Agencies Report of Noncomplian

8823

Form
(Rev. Oct. 2005)

Department of the Treasury
Internal Revenue Service

Low-Income Housing Credit Agencies
Report of Noncompliance or Building Disposition
Note: File a separate Form 8823 for each building that is disposed of or goes out of compliance.

Building name (if any). Check if item 1 differs from Form 8609 䊳

1

OMB No. 1545-1204

Check here if this is an
amended return 䊳

IRS Use Only

Street address
City or town, state, and ZIP code
2
3

Building identification number (BIN)
Owner’s name. Check if item 3 differs from Form 8609 䊳

Street address
City or town, state, and ZIP code
4

Owner’s taxpayer identification number
EIN

SSN
䊳

5

Total credit allocated to this BIN

6

If this building is part of a multiple building project, enter the number of buildings in the project

$
䊳
䊳

7 a Total number of residential units in this building

䊳

b Total number of low-income units in this building
c Total number of residential units in this building determined to have noncompliance issues
d Total number of units reviewed by agency (see instructions)
8

Date building ceased to comply with the low-income housing credit provisions (see instructions) (MMDDYYYY)

9

Date noncompliance corrected (if applicable) (see instructions) (MMDDYYYY)

10

Check this box if you are filing only to show correction of a previously reported noncompliance problem

11

Check the box(es) that apply:

䊳
䊳

䊳

Out of
compliance

Noncompliance
corrected

a Household income above income limit upon initial occupancy
b Owner failed to correctly complete or document tenant’s annual income recertification
c Violation(s) of the UPCS or local inspection standards (see instructions) (attach explanation)
d Owner failed to provide annual certifications or provided incomplete or inaccurate certifications
e Changes in Eligible Basis or the Applicable Percentage (see instructions)
f Project failed to meet minimum set-aside requirement (20/50, 40/60 test) (see instructions)
g Gross rent(s) exceed tax credit limits
h Project not available to the general public (see instructions) (attach explanation)
i Violation(s) of the Available Unit Rule under section 42(g)(2)(D)(ii)
j Violation(s) of the Vacant Unit Rule under Reg. 1.42-5(c)(1)(ix)
k Owner failed to execute and record extended-use agreement within time prescribed by section 42(h)(6)(J)
l 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
o Low-income units used on a transient basis (attach explanation)
p Project is no longer in compliance nor participating in the section 42 program (attach explanation)
q
12
13 a
b
c

Other noncompliance issues (attach explanation)
Additional information for any item above. Attach explanation and check box
Building disposition by
Sale
Foreclosure
Destruction
Other (attach explanation)
Date of disposition (MMDDYYYY)
d New owner’s taxpayer identification number
New Owner’s Name
EIN
14 Name of contact person
Street address
15

City or town, state, and ZIP code

䊳

SSN

Telephone number of contact person

(
)
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.

䊳

䊳

Signature of authorizing official

For Paperwork Reduction Act Notice, see instructions.

䊳

Print name and title

Date (MMDDYYYY)
Cat. No. 12308D

Form

8823

(Rev. 10-2005)

Form 8823 (Rev. 10-2005)

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

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:
Internal Revenue Service
P.O. Box 331
Attn: LIHC Unit, DP 607 South
Philadelphia Campus
Bensalem, PA 19020

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/reac
under Library Section, Physical Inspections, Training
Materials. 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.

Form 8823 (Rev. 10-2005)

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 (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 (note: 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

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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
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. Report any federal grant made with respect
to any building or the operation thereof during any
taxable year in the compliance period. Report changes
in common areas which become commercial, when
fees are charged for facilities, etc. In addition, 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.
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), 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. It 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.
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

Form 8823 (Rev. 10-2005)

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 from HUD by calling 1-800-245-2691 and
requesting item number HUD 11112, or they can order
the manual through www.huduser.org under
Publications.
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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Recordkeeping
7 hr., 39 min.
Learning about the law
or the form
3 hr., 16 min.
Preparing and sending
the form to the IRS
3 hr., 32 min.
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send Form 8823 to this address. Instead, see Where
To File on page 2.