Amends the Internal Revenue Code to repeal provisions of the low income housing tax credit requiring a bond to cover recapture amounts from the disposition, prior to a 15-year compliance period, of a building (or interest therein) eligible for the credit. Provides for a three-year statute of limitation (from the end of the compliance period) for assessing a recapture deficiency.
Requires owners of buildings eligible for the low income housing tax credit to file informational returns with the Secretary of the Treasury upon the occurrence of a recapture event and to provide persons who are named in such returns with specified information. Imposes penalties for failure to file required returns.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2366 Introduced in Senate (IS)]
109th CONGRESS
2d Session
S. 2366
To amend the Internal Revenue Code of 1986 to replace the recapture
bond provisions of the low income housing tax credit program.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 3, 2006
Mrs. Lincoln (for herself, Mr. Santorum, and Ms. Snowe) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to replace the recapture
bond provisions of the low income housing tax credit program.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. REPEAL OF RECAPTURE BOND RULE.
(a) In General.--Paragraph (6) of section 42(j) of the Internal
Revenue Code of 1986 (relating to recapture of credit) is amended to
read as follows:
``(6) No recapture on disposition of building (or interest
therein) reasonably expected to continue as a qualified low-
income building.--
``(A) In general.--In the case of a disposition of
a building or an interest therein, the taxpayer shall
be discharged from liability for any additional tax
under this subsection by reason of such disposition 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.
``(B) Statute of limitations.--
``(i) Extension of period.--The period for
assessing a deficiency attributable to the
application of subparagraph (A) with respect to
a building (or interest therein) during the
compliance period with respect to such building
shall not expire before the expiration of 3
years after the end of such compliance period.
``(ii) Assessment.--Such deficiency may be
assessed before the expiration of the 3-year
period referred to in clause (i)
notwithstanding the provisions of any other law
or rule of law which would otherwise prevent
such assessment.''.
(b) Information Reporting.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 of such Code (relating to information concerning
transactions with other persons) is amended by inserting after
section 6050T the following new section:
``SEC. 6050U. RETURNS RELATING TO PAYMENT OF LOW-INCOME HOUSING CREDIT
REPAYMENT AMOUNT.
``(a) Requirement of Reporting.--Every person who, at any time
during the taxable year, is an owner of a building (or an interest
therein)--
``(1) which is in the compliance period at any time during
such year, and
``(2) with respect to which recapture is required by
section 42(j),
shall, at such time as the Secretary may prescribe, make the return
described in subsection (b).
``(b) Form and Manner of Returns.--A return is described in this
subsection if such return--
``(1) is in such form as the Secretary may prescribe, and
``(2) contains--
``(A) the name, address, and TIN of each person
who, with respect to such building or interest, was
formerly an investor in such owner at any time during
the compliance period,
``(B) the amount (if any) of any credit recapture
amount required under section 42(j), and
``(C) such other information as the Secretary may
prescribe.
``(c) Statements To Be Furnished to Persons With Respect to Whom
Information Is Required.--Every person required to make a return under
subsection (a) shall furnish to each person whose name is required to
be set forth in such return a written statement showing--
``(1) the name and address of the person required to make
such return and the phone number of the information contact for
such person, and
``(2) the information required to be shown on the return
with respect to such person.
The written statement required under the preceding sentence shall be
furnished on or before March 31 of the year following the calendar year
for which the return under subsection (a) is required to be made.
``(d) Compliance Period.--For purposes of this section, the term
`compliance period' has the meaning given such term by section
42(i).''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1) of such
Code (relating to definitions) is amended by
redesignating clauses (xiii) through (xviii) as clauses
(xiv) through (xix), respectively, and by inserting
after clause (xii) the following new clause:
``(xiii) section 6050U (relating to returns
relating to payment of low-income housing
credit repayment amount),''.
(B) Paragraph (2) of section 6724(d) of such Code
is amended by striking ``or'' at the end of
subparagraph (AA), by striking the period at the end of
subparagraph (BB) and inserting ``, or'', and by adding
after subparagraph (BB) the following new subparagraph:
``(CC) section 6050U (relating to returns relating
to payment of low-income housing credit repayment
amount).''.
(C) Clerical amendment.--The table of sections for
subpart B of part III of subchapter A of chapter 61 of
such Code is amended by inserting after the item
relating to section 6050T the following new item:
``Sec. 6050U. Returns relating to payment of low-income
housing credit repayment amount.''.
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to any liability for the credit recapture
amount under section 42(j) of the Internal Revenue Code of 1986
that arises after the date of the enactment of this Act.
(2) Special rule for low-income housing buildings sold
before date of enactment of this act.--In the case of a
building disposed of before the date of the enactment of this
Act with respect to which the taxpayer posted a bond (or
alternative form of security) under section 42(j) of the
Internal Revenue Code of 1986 (as in effect before the
enactment of this Act), the taxpayer may elect (by notifying
the Secretary of the Treasury in writing)--
(A) to cease to be subject to the bond requirements
under section 42(j)(6) of such Code, as in effect
before the enactment of this Act, and
(B) to be subject to the requirements of section
42(j) of such Code, as amended by this Act.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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