This week’s Golden Horseshoe is awarded to the IRS for a lack of oversight that led to $15.6 billion in questionable Low-Income Housing Tax Credits (LIHTC) on more than 68,000 claims, according to an audit report by the Treasury Inspector General for Tax Administration (TIGTA).
“There were potentially large dollar amounts of questionable LIHTC claims based on information from key forms and schedules submitted to the IRS,” the watchdog found.
Filed over tax years 2015-2019, the questionable claims “lacked or did not match supporting documentation due to potential reporting errors or noncompliance,” according to the IG report.
The inspector general found “significant issues” with the reliability of data, reconciliation discrepancies, and other issues on the forms submitted to the IRS.
“We reviewed the IRS’s processes and procedures to ensure [housing credit agency (HCA)], building owner, and taxpayer compliance with LIHTC provisions and found significant issues with data reliability that increase the risk of undetected errors and noncompliance,” the IG reported.
State housing credit agencies award the credits for qualified housing projects, but the IRS is responsible for oversight of the credits.