In 2000, the Internal Revenue Service (the “IRS”) released Technical Advice Memoranda (the “TAMs”) published by the National Office in connection with audits of tax credit projects. A Technical Advice Memorandum normally is issued by the National Office of the IRS upon request from a field office in connection with an audit of a taxpayer when the IRS agents need guidance on technical issues. Like a private letter ruling issued in response to a taxpayer request, a TAM pertains only to one taxpayer and is not considered definitive authority. Like a private letter ruling, however, a TAM also is a good indication of the IRS National Office’s position on technical issues, especially on issues where there is no other direct authority.
All of the TAMs address issues pertaining to the determination of the tax credit basis of the projects. However, they are not specifically concerned with technical issues under Section 42 of the Tax Code dealing with low-income housing tax credits. Instead they deal with matters relating to the inclusion in depreciable basis of the property of various fees and costs incurred by the owner of the property during its development and construction.
For additional information, download a letter of clarification from the U.S. Department of the Treasury, dated October 8, 2000.