delay or circumvent compliance monitoring reviews.1 The date of noncompliance is the earlier of the date (1) the owner refused to allow a site visitation or access to tenants’ records or (2) first postponed the site visit or access to tenant’s records.
Example 1: Repetitive Delays
A state agency notified an owner on April 21, 2004, that a property was to be inspected and requested that the inspection be conducted on May 20, 2004. On May 2, 2004, the owner requested that the inspection be postponed until June 16, 2004, to give them time to get the records together. Then, the day before the inspection, the owner called to say that the property manager would not be available. The inspection was rescheduled for June 28, 2004, but the owner called again on June 27 to say that not all the records were available at the site and it would be more convenient to work at his office during the week of July 12, 2004.
The owner’s repeated requests for postponements are not reasonable. The property is out of compliance on May 2, 2004.
State agencies may remove a LIHC property from the program if the owner fails to respond to repeated notices for monitoring reviews. See chapter 21 for complete discussion.
Back in Compliance
The owner is back in compliance when the agency performs the site visit and/or reviews the tenants’ files.
Example 1: Site Visit Performed Late
A state agency filed form 8823 noting noncompliance because the owner refused to allow the state agency’s representatives on the property to perform the physical inspection. The date of noncompliance was August 15, 2004. The taxpayer received the IRS’ notice identifying the noncompliance, after which the site inspection was completed on December 15, 2004, when state agency resources were available.
The property is back in compliance on December 15, 2004 and a Form 8823 should be filed noting the correction date.
TD 8430, 1992-2 C.B. 14
1 The IRS recommends that if the site visit/file review can be rescheduled within 45 days of the initial date, the appointment should be reschedule; longer postponements should be discouraged except under unusual circumstances. There is no legal authority for allowing this time period: it is similar to IRS policy for rescheduling audit appointments during an audit. See Internal Revenue Manual 184.108.40.206.3(4).
Revised October 2009