On Feb. 5, the Treasury Department released the second quarter update to the 2012-2013 Priority Guidance Plan. The Treasury Department’s Office of Tax Policy and the IRS use the Guidance Priority List each year to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance.

The Guidance Priority List focuses resources on guidance items that are most important to taxpayers and tax administration. Published guidance plays an important role in increasing voluntary compliance by helping to clarify ambiguous areas of the tax law. The updated plan includes projects that the IRS added to the plan based on provisions in the American Taxpayer Relief Act and that became priorities between Nov. 20 and Dec. 31, 2012.

In the second quarter update, the Treasury Department reaffirmed its commitment to several low-income housing tax credit-related objectives. The Treasury plans address the following objectives:

• Issuing guidance relating to the application of the design and construction accessibility requirements under the Fair Housing Amendments Act of 1988;
• Issuing regulations under Section 42 relating to compliance monitoring, including issues identified in Notice 2012-18. Here, the IRS will examine the efficacy of the Physical Inspections Pilot Program, under which housing finance agencies (HFAs) were able to use HUD REAC inspections in lieu of the standard HFA physical inspections. In particular, the IRS will examine whether the fact that the units inspected won’t be the same as the units for which files are reviewed will diminish the value of the HFA review process;
• Reviewing Revenue Procedure 2007-54, which provides disaster relief under Section 42 for Presidentially Declared Disaster Areas;
• Issuing guidance concerning the exception under Section 42(d)(6) for any federally or state-assisted building. This section has to do with the ability of acquired buildings to claim credits when the current owner purchases the building less than 10 years after prior acquisition or substantial rehabilitation and the building is federally assisted; and
• Issuing regulations concerning utility allowances under Section 42(g)(2)(B)(ii) for submetered buildings. Interim guidance on this issue was published in Notice 2009-44 and was published in the Federal Registerof Aug. 7, 2012.

The Treasury Department has invited the public to comment on the plan throughout the year.