What is the purpose of IRS Form 8823?

The purpose of IRS Form 8823 is to report non-compliance with the provisions of the Low-Income Housing Tax Credit (LIHTC) program. This form is primarily used by qualified allocation plans and housing credit agencies to notify the IRS about any instances where a property fails to meet the requirements set forth in the tax code. Non-compliance can involve issues such as a failure to maintain the required number of rental units for low-income tenants or failing to adhere to income limits for tenants. Reporting this non-compliance is essential for maintaining the integrity of the LIHTC program and ensuring that the tax credits are administered correctly and fairly.