New GAO Report Points to Weaknesses in LIHTC Program Oversight and Recommends HUD Involvement in Administration

On July 23, 2015, the Government Accountability Office (GAO) released a report that focused on oversight weaknesses of the Low Income Housing Tax Credit (LIHTC) program by the Internal Revenue Service (IRS). Specific areas discussed included the lack of reliability of data being compiled and the limited monitoring requirements of the state housing finance agencies administering the credits. In this report, GAO suggests Congress consider designating HUD as a joint administrator for program compliance oversight-specifically to assist in analyzing the program’s effectiveness.

The LIHTC Program is big business, costing an estimated $8 billion in 2014 alone. All stakeholders involved see the need for private equity investment to fund the continued development of and rehabilitation of existing low-income housing communities. However, the decision as to which agencies should oversee the program, and to what extent, will definitely be the subject of future debates.

Regardless of whether the IRS steps up its current oversight tasks or engages with interagency coordination with HUD, both paths will require congressional involvement and additional financial resources to become reality.