IRS Seeks Comments on LIHTC Reporting and Whistleblower Withholding Forms

IRS Reviews Burden of Housing Credit Compliance

The IRS is seeking public comment on the information collection requirements related to the Low-Income Housing Tax Credit (LIHTC) program under Section 42 of the Internal Revenue Code. This request comes as part of the Paperwork Reduction Act, where the IRS is evaluating the necessity and efficiency of existing information collections. The LIHTC program, established under Section 42, incentivizes private investment in affordable housing.

The IRS estimates that compliance with LIHTC reporting requirements takes over 400,000 hours annually. Specifically, this review focuses on Form 8609, Low-Income Housing Credit Allocation and Certification, and Form 8610, Annual Low-Income Housing Credit Agencies Report. Form 8609 is used by building owners to certify a building's eligibility for the credit, while Form 8610 is filed annually by state housing credit agencies to report their allocations and reconcile them with their credit ceiling under Section 42(l)(3). The due date for public comments is March 23, 2026.

The Compliance Ecosystem: Forms 8609 and 8610

The IRS is reviewing the paperwork burden associated with the Low-Income Housing Tax Credit (LIHTC) program. This review, as previously mentioned, focuses on Form 8609, Low-Income Housing Credit Allocation and Certification, and Form 8610, Annual Low-Income Housing Credit Agencies Report, with public comments due by March 23, 2026. These forms are critical components of the LIHTC compliance ecosystem.

• Form 8610 (The Agency Side): State housing credit agencies use Form 8610 to report annual low-income housing credit allocations to the IRS, as required by Internal Revenue Code Section 42(l)(3). Section 42(l)(3) mandates that these reports include the annual credit amount allocated to each building, information to identify each building and its taxpayer, and any other necessary information for administering the LIHTC program. Form 8610 serves as a transmittal for copies of Form 8609 issued during the year, reconciling total allocations with the state's credit ceiling. The affected public for this form is primarily state and local governments.

• Forms 8609 & 8609-A (The Owner Side): Building owners utilize these forms to certify a building's eligibility and report compliance annually throughout the 15-year compliance period. Specifically, owners use Form 8609 to obtain a housing credit allocation from the housing credit agency and to certify information about the project. A separate Form 8609 must be issued for each building in a multiple-building project. Owners also file Form 8609-A annually to report compliance with low-income housing provisions and calculate the credit. As detailed in Treasury Decision 10036, these forms are also used to report compliance with the average income test under Section 42(g)(1)(C). Section 42(g)(1)(C) allows a project to qualify for the LIHTC if at least 40% of its units are occupied by tenants whose average income does not exceed 60% of the area median gross income (AMGI). The affected public for these forms includes businesses and for-profit organizations.

Whistleblower Withholding & How to Comment

The IRS is also seeking public comment on the information collection requirements related to applications for reduced withholding rates on whistleblower award payments. These payments arise from individuals providing information to the IRS that leads to the detection and punishment of tax law violations. While whistleblower awards are subject to federal income tax, the specific withholding rate can vary. Generally, awards exceeding $10,000 are subject to a flat withholding rate for U.S. citizens and residents.

A notice, published in the Federal Register, specifically invites comments on the 'Application for Reduced Rate of Withholding on Whistleblower Award Payment'. Taxpayers should be aware that whistleblower awards are also subject to automatic sequestration reductions under the Budget Control Act of 2011. Payments to non-residents are typically treated as fixed, determinable, annual, or periodical (FDAP) income and withheld at 30%, unless a treaty applies.

The IRS is particularly interested in feedback on the following aspects of this information collection:

• Is the collection of information necessary for the proper performance of the IRS's functions, including whether the information has practical utility?
• Is the estimate of the burden of the collection of information accurate?
• Can the burden of the collection of information be minimized, including through the use of automated collection techniques or other forms of information technology?

Interested parties are encouraged to submit comments to pra.comments@irs.gov. Please reference OMB Control numbers in your submission. The deadline for comments is March 23, 2026, to ensure consideration.