Which of the following best summarizes the potential penalties for LIHTC non-compliance?

The potential penalties for Low-Income Housing Tax Credit (LIHTC) non-compliance are multifaceted, making the summary that includes fines, recapture of credits, and potential forfeiture of benefits the most comprehensive.

Fines can be imposed as a direct consequence of failing to adhere to the compliance requirements outlined by the LIHTC program. This ensures that any violations are met with financial repercussions.

Recapture of credits is a significant factor; if a project does not maintain compliance over the required commitment period, previously granted tax credits may be rescinded. This means that the tax benefits that were given based on certain qualifications could be taken back, which can have a substantial financial impact on the developers or investors involved.

Furthermore, the potential forfeiture of benefits highlights the severity of non-compliance. Beyond just financial penalties, failing to meet obligations can lead to losing the overall benefits intended for providing affordable housing, such as continued access to tax credits or other public funding.

In contrast, options that emphasize only increased taxes, loss of project funding, or solely audits do not capture the full array of consequences that can arise from a failure to comply with LIHTC regulations. Audits may happen as a result of non-compliance but do not represent a