SECTION 2. BACKGROUND

.01 Section 7430 provides for awards of reasonable administrative and litigation costs incurred by taxpayers who substantially prevail in administrative or court proceedings brought by or against the United States in connection with the de

Number of Low-Income

Units in the Low-Income

Housing

Number of Low-Income Units Selected for Inspection or Low-Income

Certification

Review (Minimum Unit

Project Sample Size)

1 1

2 2

3 3

4 4

5–6 5

7 6

8–9 7

10–11 8

12–13 9

14–16 10

17–18 11

19–21 12

22–25 13

26–29 14

30–34 15

35–40 16

41–47 17

48–56 18

57–67 19

68–81 20

82–101 21

102–130 22

131–175 23

176–257 24

258–449 25

450–1,461 26

1,462–9,999 27

1For low-income units, including vacant units, that do not pass inspection under the REAC protocol, it may be possible to correct the noncompliance and avoid loss of credits or recapture. See § 1.42–5(e)(4).

2The HUD REAC requires the use of the REAC sampling methodology, which is incorporated in the REAC UPCS inspection software. However, mere use of the public version of the REAC UPCS inspection software is not, by itself, sufficient to qualify as use of the REAC protocol.

March 14, 2016 436 Bulletin No. 2016–11

termination, collection, or refund of any tax, interest, or penalty under title 26.

.02 Section 7430(c)(3)(B), as amended by the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105–206, 112 Stat. 685 (Jul. 22, 1998) (RRA ’98), provides that a court may award reasonable attorneys’ fees under section 7430(a) in excess of fees paid or incurred if those fees are less than the reasonable attorneys’ fees because an individual is representing the prevailing party for no fee or for a fee which, taking into account all the facts and circumstances, is no more than a nominal fee (i.e., pro bono).

.03 Section 7430(c)(3)(A) provides that the fees for the services of an individual (whether or not an attorney) who is authorized to practice before the United States Tax Court or before the Internal Revenue Service (the Service) shall be treated as fees for the services of an attorney.

.04 Section 7430(c)(3)(B) further provides that an award of fees for representation on a pro bono basis may only be paid to the individual providing the pro bono representation or such individual’s employer.

.05 On November 25, 2009, the Treasury Department and the Service published proposed amendments to the Treasury regulations relating to awards of administrative costs and attorneys’ fees under section 7430 (74 FR 61589) to conform the regulations to the amendments that were made to section 7430 in RRA ’98, including the amendment allowing for an award of reasonable attorneys’ fees when a taxpayer is represented on a pro bono basis. Final regulations are being issued contemporaneously with this revenue procedure (Treasury Decision 9756).

.06 In response to public comments received on the proposed regulations, this revenue procedure supplements the final regulations by providing more detailed information and processes specific to pro bono representation. A summary of the comments can be found in the preamble to the final section 7430 regulations.