Affordable housing finance
Form 8823
The report credit agencies must file with the IRS on finding LIHTC noncompliance or a disposition; IRS Pub. 5913 (2024) is the operative guide.
Definition
State credit agencies must monitor LIHTC projects and report what they find. Form 8823 — "Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition" — goes to the IRS when an agency identifies noncompliance (over-income move-ins, rent overages, habitability failures, extended-use violations) or learns of a disposition. Owners first get a correction period — up to 90 days from notice, extendable to six months for good cause under the § 1.42-5 monitoring regulations — and the agency reports whether or not the issue was cured. IRS Publication 5913 (2024) replaced the old 8823 audit guide as the category-by-category standard.
Why it matters in an underwrite
An 8823 is not itself a tax assessment — cured findings usually end quietly — but it is the paper trail that draws IRS attention and the record a buyer inherits. Diligence on any LIHTC acquisition means pulling the agency file: patterns of 8823s (chronic certification or utility-allowance errors) signal management risk, and uncured findings carry live recapture exposure. For operators, the correction period is the whole game — cure and document inside it.
Sources & related guides
See also
See the term in the law itself
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Last reviewed 2026-07-29. General information, not legal advice.