TAX ASSISTANCE IN LOW TAX INDUSTRIES
Meaning of the term ‘Tax Assistance’ : Basically, Tax assistance is the assistance Provided in terms of tax-paying. Certain industries require tax industries require tax assistance in order to reduce their taxes. Subsequently, Many programs have been set up to assist industries in tax-paying.
Volunteer Income Tax Assistance(VITA) program: This provides free income tax return preparation for certain taxpayers. The VITA program assists taxpayers who have limited or moderate incomes, have limited English skills, or are elderly or disabled. Many VITA sites offer electronic preparation and transmission of income tax returns.
Tax Credit Assistance Program (TCAP): The Tax Credit Assistance Program (TCAP) is a Federal housing grant program administered by HUD which assists Low Income Housing Tax Credit (LIHTC) projects funded during 2007, 2008 and 2009. The TCAP program is part of the American Recovery and Reinvestment Act which was signed by President Obama on February 17, 2009. The program is designed to assist troubled LIHTC deals struggling to find a tax credit investor.
As a result of the faltering economy and financial markets, the value of Low Income Housing Tax Credits plummeted in 2008 and continued to decline during 2009. Most LIHTC deals struggle to find investors. The TCAP program provides supplemental grant funds to make the project feasible.
Administration of the TCAP funds at the Federal level occurs at HUD. HUD then delegates administration of the program on the state level to the designated housing finance agency charged with administering the LIHTC program. HUD established the basic requirements of the program and the state housing finance agencies established more specific qualification and award criteria.
TCAP submission requirements for state agencies:
State housing credit agencies have only 30 days from the publication of the notice to submit certain information to HUD, and HUD clearly states in the notice that an agency risks losing its entire formula allocation if it does not submit all required information within the 30 days. The TCAP Submission Package includes: • Statement of Intent: The state agency must indicate whether it will accept the entire formula allocation or, in the alternative, the exact portion of funds it will accept. The amount cannot be changed once the submission is complete. The agency must also provide information related to federal grants it administers and the status of its 2009 LIHTC allocation process.
• Competitive Selection Criteria: The state agency must describe its selection criteria for TCAP funding in a written statement, which must be available for public comment for at least five days. Of note is the guidance that the agency issues must define “award of LIHTCs” and apply this definition uniformly to all projects. The “award of LIHTCs” may be as early as a project’s date of public notice of the LIHTC funding decision. While the primary selection criterion must be the ability of the project to be completed by February 16, 2012 (three years from the date of the Recovery Act enactment), the state agency may otherwise craft its own competitive criteria.
• Deadline Enforcement: In addition to the project completion deadline of February 16, 2012, an agency must commit not less than 75 percent of its TCAP award by February 16, 2010, and all projects must spend 75 percent of TCAP funds by February 16, 2011. Given the TCAP-mandated deadlines, HUD is requiring, as part of the submission, a statement describing procedures to meet the TCAP deadlines and specifics on the redistribution of funds from projects that do not comply with deadlines established by the state housing credit agency.
• Accountability and Transparency: Each agency must publish its selection criteria for a public comment period of not less than five days and...
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