Exempt Status for
Low-Income Housing Groups

WASHINGTON - The IRS today announced proposed guidance that will help charities involved in low-income housing to obtain tax exemption more swiftly. The announcement represents an ongoing cooperative effort between the IRS and the housing community to provide beneficial guidance.

The guidance is in the form of a proposed revenue procedure. It lists general exemption qualification standards for housing organizations under section 501(c)(3) of the Internal Revenue Code and also provides a specific safe harbor for low-income housing groups seeking tax-exempt status. In addition, the proposed guidance invites comments and requests for a hearing.

Each year, the Service processes nearly 1,000 exemption applications filed by housing organizations. When implemented, the new guidance will reduce the average processing time for these applications from one year to 45 days in most cases. In addition, by compiling tax exemption rules in one place, the guidance will make it easier for housing organizations to know the full range of-exemption options and select the one that best suits their needs.

Low-income housing organizations and other charitable organizations seeking tax exemption are reminded that they must apply for exemption by submitting an application on IRS Form 1023 or 1024. Detailed information on the application and the requirements for tax exempt status is contained in Publication 557, "Tax Exempt Status for Your Organization." Free copies of the publication and the package of application forms can be obtained by calling the Service's toll-free number 1-800-TAX-FORM (1-800-829-3676).

The announcement containing the proposed guidance (Ann. 9537) is attached. It will appear in Internal Revenue Bulletin 1995-20, dated May 20, 1994.

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