SECTION 2. CHANGE

.01 Under §1.42–13(a) of the Income Tax Regulations, the Secretary may provide guidance to carry out the purposes of § 42 through various publications in the Internal Revenue Bulletin. Rev. Proc. 95–28 provided a procedure for temporary relief from certain requirements under § 42 in major disaster areas. Sections 5 and 6 of Rev. Proc. 95–28 provided certain relief from the carryover allocation provisions under 42(h)(1)(E) and § 1.42–6. The carryover allocation provisions were later amended by section 135(a)(1) of the Community Renewal Tax Relief Act of 2000 (Public Law 106–554) to allow a building that receives an allocation of credit in the second half of a calendar year to qualify for the carryover allocation of credit if the taxpayer expends an amount equal to 10 percent or more of the taxpayer’s reasonably expected basis in the building within six months of receiving the allocation. In addition, § 1.42–6 was modified under T.D. 9110, 2004–1 C.B. 504, on December 31, 2003, to reflect the amendments to § 42(h)(1)(E). This revenue procedure makes changes to the provisions of Rev. Proc. 95–28 to extend temporary relief in major disaster areas to the carryover allocation provisions taking into account the amendments to § 42 and changes to the regulations.

.02 Section 8 of Rev. Proc. 95–28 provided certain relief to Agency compliance monitoring requirements under § 1.42–5.

Several provisions of § 1.42–5 were subsequently modified under T.D. 8859, 2000–1 C.B. 429, on January 13, 2000. This revenue procedure incorporates the modified compliance monitoring requirements under T.D. 8859.

.03 The Internal Revenue Service (Service) has issued several notices suspending certain § 42 requirements for Owners that provide temporary housing to individuals residing in certain major disaster areas who have been displaced because their residences have been destroyed or damaged as a result of the disaster. See Notice 2004–74, 2004–2 C.B. 875; Notice 2004–75, 2004–2 C.B. 876; and Notice 2004–76, 2004–2 C.B. 878; Notice 2005–69, 2005–2 C.B. 622; and Notice 2006–11, 2006–1 C.B. 457. This revenue procedure provides a procedure for Owners to rent on a temporary basis vacant low-income units to certain displaced low-income individuals that resided in major disaster areas described in section 4 of this revenue procedure.