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Guide for Completing Form 8823 - page 66 / 197





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third party verification, was not performed until after the household moved in.

Example 7: Insufficient Documentation of Initial Eligibility

A household moves into a unit that the owner wishes to include as a low- income unit. Income eligibility was not properly documented. The state agency could not reasonably determine that the household was income qualified. The following are possible documentation noncompliance issues:


Application/questionnaire is not sufficiently detailed to disclose all sources of income and/or assets,

  • b.

    Not all sources of income are verified,

  • c.

    Not all sources of assets are verified,

  • d.

    Verifications are insufficient,

  • e.

    Not all adult household members’ income and/or assets are disclosed



and included; Tenant income certification form is not prepared, signed and/or dated; and . Other state-required forms designed to document compliance with IRC

§42 are not in file.

Back in Compliance

Insufficient Documentation

Units are back in compliance when it is determined that an income-qualified household occupies the unit. Evidence of corrected noncompliance includes copies of certification paperwork such as the tenant’s application, income and asset questionnaire, third party verifications, and tenant income certification.

In the event that income eligibility was not properly documented and the state agency cannot reasonably determine that the household is eligible, the noncompliance can be corrected in either of two ways:

  • 1.

    A new certification can be performed using current income and asset sources and current income limits. Assuming the household is eligible, the unit would be out of compliance on the date of move in and back in compliance on the date the new certification signed (Form 8823 should be filed); or

  • 2.

    A retroactive certification can be performed which completely and clearly documents the sources of income and assets that were in place at the time the initial certification should have been effective, and applies income limits that were in effect on that date. Assuming the owner can document that the household was income eligible at the time of move in, the unit should not be considered out of compliance. The owner has clarified the noncompliance; Form 8823 should not be filed.

Evidence of corrected noncompliance may include a copy of the full certification, including application, third party verifications, and/or the tenant income certification.


Revised October 2009

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