The IRS has issued a notice of proposed rulemaking and an advance notice of rulemaking for the federal new markets tax credit program, proposing some changes to the program’s rules and soliciting public comments on these and on a series of questions. Both relate to an attempt to find ways to increase the volume share of NMTC investments in non-real estate businesses as opposed to real estate. The IRS is soliciting public comments by September 8, and has scheduled a public hearing for September 29. One proposed change permit a CDE that receives certain returns of capital from a non-real estate business investment during the seven-year NMTC period to meet the program’s continuous investment requirement by investing these funds in a community development financial institution (CDFI) that is a CDE. The advanced notice of rulemaking seeks comments on a proposal to simplify the substantiation requirement for a CDE that make a loan to or investment in another CDE (second CDE) if certain conditions are met, one of which is if the second CDE uses the NMTC proceeds to make smaller-sized loans to non-real estate businesses.
Notice of Proposed Rulemaking: Read More…
Advanced Notice of Rulemaking: Read More…
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