May 01, 1995
Exempt Status for
Low-Income Housing Groups
WASHINGTON - The IRS today announced proposed guidance that
will help charities involved in low-income housing to obtain tax
exemption more swiftly. The announcement represents an ongoing
cooperative effort between the IRS and the housing community to
provide beneficial guidance.
The guidance is in the form of a proposed revenue procedure. It
lists general exemption qualification standards for housing
organizations under section 501(c)(3) of the Internal Revenue Code
and also provides a specific safe harbor for low-income housing
groups seeking tax-exempt status. In addition, the proposed guidance
invites comments and requests for a hearing.
Each year, the Service processes nearly 1,000 exemption
applications filed by housing organizations. When implemented, the
new guidance will reduce the average processing time for these
applications from one year to 45 days in most cases. In addition, by
compiling tax exemption rules in one place, the guidance will make
it easier for housing organizations to know the full range
of-exemption options and select the one that best suits their needs.
Low-income housing organizations and other charitable
organizations seeking tax exemption are reminded that they must
apply for exemption by submitting an application on IRS Form 1023 or
1024. Detailed information on the application and the requirements
for tax exempt status is contained in Publication 557, "Tax Exempt
Status for Your Organization." Free copies of the publication and
the package of application forms can be obtained by calling the
Service's toll-free number 1-800-TAX-FORM (1-800-829-3676).
The announcement containing the proposed guidance (Ann. 9537)
is attached. It will appear in Internal Revenue Bulletin 1995-20,
dated May 20, 1994.
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