What is the role of the IRS in the administration of LIHTC?

The IRS plays a crucial role in the Low-Income Housing Tax Credit (LIHTC) program by establishing guidelines and regulations that govern how the program operates. This includes setting forth eligibility requirements for both the tax credits and for the buildings that are to be developed with the help of these credits. Additionally, the IRS is responsible for overseeing compliance to ensure that the properties adhere to the affordability requirements and remain in service as low-income housing for the specified duration.

This oversight includes monitoring the actions of state housing agencies, which are tasked with allocating the tax credits to developers. The IRS ensures that the program is administered in a manner that aligns with federal laws and objectives, thus promoting affordable housing while ensuring fair access to the credits.

In contrast, the other choices do not accurately depict the IRS's role. The IRS does not provide funding for LIHTC projects directly; rather, it provides tax credits that serve as an incentive for private investment in low-income housing. Assessing property values for tax purposes falls under the purview of local and state tax authorities rather than the IRS. Additionally, the management of tenant applications is typically handled by property owners or developers rather than the IRS.