You Deserve to Pass all Audits

Our Approach

The IRS affirms that compliance is based on a property owner’s ability to prove due diligence. Preferred Compliance Solutions only staffs nationally certified and recognized LIHTC and other affordable housing compliance professionals. An audit can be intimidating and intense for your property staff. Because you deserve to pass all audits, we developed a program that offers reliable support in preparation for and throughout an audit. We are dedicated partners in protecting your investment.

Get Personalized Help

Full and Exceptional Support

Our compliance professionals work very closely with your property staff, providing exceptional support and guiding the way. We can review files and state-required reports, and prepare documents and reports prior to an audit. But best of all, we make ourselves available to provide compliance guidance and help prepare responses to prove owner due diligence. Over the years, we've helped thousands of owners stay free from 8823s and other noncompliance findings. We’ll do the same for you.

We’re on Your Side

We review and help prepare documents and reports for an audit
File review in preparation for any audit
In-person support on the day of audit
Audit response assistance and submission of response

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Frequently Asked Questions

What is a state LIHTC or affordable housing audit?

A state audit, conducted by your state housing agency, conducts routine inspections of LIHTC and other affordable housing properties to ensure they follow IRS and HUD compliance requirements. State housing agencies are required to perform desk audits, inspect housing during a site visit, and review tenant files.

What can I expect from a compliance audit?

A state auditor performs a desk audit, conducts a site visit, reviews the property tenant files, and reports to the owner a summary of the audit results. Any noncompliance issues might affect the property owner’s eligibility to retain tax credits and affect the future operation of the property. If a noncompliance issue is detected, the state auditor will file a Form 8823 with the IRS. The IRS sends a notification letter to the property owner that identifies the noncompliance issues and instructs the property owner to omit non qualified low-income housing units when computing the tax credit under IRC § 42. The noncompliance may result in recapture of previously claimed tax credits. The owner is also notified to resolve the noncompliance issue by contacting the state housing agency.

How do I prepare for a compliance audit?

Here are a few suggestions:

1. Make sure the property is in good physical condition. Address any potential safety or health-related problems on the property, including potholes, trash and broken glass, damaged playground equipment or sharp edges, water damage, and damaged or missing window screens.

2. Review files and keep all forms, reports, and files up to date with proper signatures, dates, and supporting documents. A third-party affordable housing compliance firm is a great resource to complete fast and detailed review of files.

3. Put operation procedures in writing and see that property management staff collectively understand and follow the procedures.

4. Keep important regulations and covenant documents in one place for simple access and easy reference.

What do I do if my affordable housing property has noncompliance issues?

If an audit report reflects a noncompliance issue, the owner has 30-90 days to notify the state housing agency that the noncompliance issue is resolved. The state housing agency then determines if the owner is in compliance, corrected the noncompliance, or remains out of compliance. The time to correct a noncompliance issue might be extended to six months with the state housing agency’s approval. Once the noncompliance issue is resolved, the state housing agency will file a “back in-compliance” Form 8823 with the IRS. Noncompliance issues should be corrected immediately.

What happens if I overcharge rent for an affordable housing unit?

If an affordable housing unit is discovered out-of-compliance with rent limits, the unit cannot be counted as a low-income unit for the rest of the calendar year and into the next year. This effects the ability to claim tax credits for the property, and in some cases, the owner may be required to refund all overpaid rent to the tenant.