Overcoming the TOP 10(+/-) Most Troubling Tax Credit Compliance Pitfalls - PowerPoint PPT Presentation

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Overcoming the TOP 10(+/-) Most Troubling Tax Credit Compliance Pitfalls

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  1. Overcoming the TOP 10(+/-) Most Troubling Tax Credit Compliance Pitfalls 1-877-783-1133 www.theopro.com

  2. Survey of over 200 Individuals • Top “10” Compliance Challenges 1-877-783-1133 www.theopro.com

  3. But First • What is your toughest compliance challenge? 1-877-783-1133 www.theopro.com

  4. 1-877-783-1133 www.theopro.com

  5. #1: Does Your Management Team Know Section 42? 1-877-783-1133 www.theopro.com

  6. This is a TAX program • Minimum 30-year compliance • Tax benefits at risk based on UNIT, BUILDING, & PROJECT compliance. 1-877-783-1133 www.theopro.com

  7. Service Available! www.theopro.com • TheoPRO has 12 “ready” courses! • TheoPRO conducts on-going web casts! • TheoPRO tests for BASIC COMPLIANCE COMPETENCE: BACE-42! 1-877-783-1133 www.theopro.com

  8. #2: Does Your Management Team Know The PROJECT? • PROJECT Definition? • Minimum Set-aside Election? • State-specific Set-asides? 1-877-783-1133 www.theopro.com

  9. #2: Building or Project • Unit Transfers 1-877-783-1133 www.theopro.com

  10. #2: Building or Project • 100% vs. Mixed Use Projects • Applicable Fraction • Available Unit Rule • Unit Vacancy Rule 1-877-783-1133 www.theopro.com

  11. Service Available! www.theopro.com #3: Is there a pre-approval process prior to move-in? How much is it worth to know that families are qualified at move-in? 1-877-783-1133 www.theopro.com

  12. TheoPRO ‘X-ACT Forms www.theopro.com • #4: Thorough and Up-to-date Forms? • Application • Verifications • Certification 1-877-783-1133 www.theopro.com

  13. The Tenant Income Certification

  14. The Tenant Income Certification

  15. #5: Student Rules 5-Month Rule Calendar Year 1-877-783-1133 www.theopro.com

  16. #5: Student Rules 5 Full-time Student Exceptions 1-877-783-1133 www.theopro.com

  17. Title IV includes AFDC and TANF Students Exemptions • “Singleparents and their CHILDREN…” • “Students who are married and entitled to file a JOINT income tax with spouse.” • “Receiving assistance under TITLE IV of the Social Security Act; :

  18. Student Exemptions • “Enrolled in a job training program receiving assistance under the Job Training Partnership Act or other SIMILARprograms funded by a state or local government agency.” • “Previously receiving foster care”. : Compliance Basics & Fundamentals PROGRAM RESTRICTIONS

  19. Student Exemptions If anyone in the household is NOT a full-time student, the household student qualified for a low-income unit. : Compliance Basics & Fundamentals PROGRAM RESTRICTIONS

  20. On-line Education • IRC 170(b)(1)(A)(ii): Educational Institution: • “One that normally maintains a REGULAR faculty and curriculum, and NORMALLY has an enrolled body of pupils or students in attendance at the place where its educational activities are REGULARLY carried on.” 1-877-783-1133 www.theopro.com

  21. The Tenant Income Certification

  22. #6 Does Your Management Team Know How to Calculate? 8823 Line 11a: “Over-income at move-in”: 1-877-783-1133 www.theopro.com

  23. Product for Sale www.theopro.com TheoPRO’s Employment Calculation Worksheet! Because how you calculate makes all the difference! 1-877-783-1133 www.theopro.com

  24. A: Child Support Issues 1-877-783-1133 www.theopro.com

  25. Court-ordered or actual: Which one do I use? 1-877-783-1133 www.theopro.com

  26. Court-ordered Unless two conditions are met: Certify that the full amount is not being received; Applicant can prove reasonable attempts to collect amount due 1-877-783-1133 www.theopro.com

  27. What if Inconsistent Payments are being received? 1-877-783-1133 www.theopro.com

  28. Check State Agency policy otherwise Average payments 1-877-783-1133 www.theopro.com

  29. Example MonthChild Support January $50.00 February $40.00 March $ 0.00 April $50.00 Total $140.00 1-877-783-1133 www.theopro.com

  30. Example $140 / 4 months = $35 / month x 12 months=$420 Or $140 for 4 months x 3 = $420 1-877-783-1133 www.theopro.com

  31. Arrearages 1-877-783-1133 www.theopro.com

  32. Arrearages If no arrearages are currently being received, count only the full amount of child support due as income; (actual amount if conditions are met) 1-877-783-1133 www.theopro.com

  33. Arrearages If arrearages are currently being received include as part of annual income 1-877-783-1133 www.theopro.com

  34. Example MonthChild SupportArrearage January $50.00 $50.00 February $40.00 $0.00 March $ 0.00 $0.00 April $50.00$50.00 Total $140.00 $100.00 1-877-783-1133 www.theopro.com

  35. Example Total $140.00 + $100.00 = $240 / 4 months = $60 / month x 12 months=$720 Or $240 for 4 months x 3 = $720 1-877-783-1133 www.theopro.com

  36. The Tenant Income Certification

  37. #7: Calculating Complex Assets 1-877-783-1133 www.theopro.com

  38. Pensions/Annuities: • Periodic vs. Lump Sum 1-877-783-1133 www.theopro.com

  39. How to calculate value vs. earnings • Market Value • Cash Value • Earnings 1-877-783-1133 www.theopro.com

  40. Here’s what you really want to know: Market Value: What is the current full value of this asset? Cash Value: How much of the current full value can this individual withdraw from this account, net of any penalties 1-877-783-1133 www.theopro.com

  41. Earnings: How much is this asset anticipated to earning in interest, dividends, or other cash benefits during the next 12 months? If unable to project, please provide YTD or most recent quarter earnings 1-877-783-1133 www.theopro.com

  42. PENSIONS (Since Change 4) C H A N G E 4 C H A N G E 4 • If the applicant is receiving PERIODIC PAYMENTS from a pension fund, treat these payments as regular INCOME. • Do not count the remaining funds in the account as an ASSET. 1-877-783-1133 www.theopro.com

  43. The Tenant Income Certification

  44. #8 Which INCOME Limits Do We Use? • 1st Building in Project’s PISD • To “HERA” or not to “HERA”? • What if income limits decrease? 1-877-783-1133 www.theopro.com

  45. The Tenant Income Certification

  46. Available for Sale www.theopro.com TheoPRO X-CEL Certification Calculator 1-877-783-1133 www.theopro.com

  47. #9 Which RENT Limits Do We Use? A Word About Utility Allowances 8823 Line 11g 1-877-783-1133 www.theopro.com

  48. #10: Does Your Management Team Know Important Timing Issues? Verification, Certification, and Recertification 8823 Line 11b 1-877-783-1133 www.theopro.com

  49. Confusing Effective Dates • B.120-day rule • C. Do we have to recertify annually? When? 1-877-783-1133 www.theopro.com

  50. D. The Importance of the First Year of the Credit Period! 1-877-783-1133 www.theopro.com