There are no new extensions currently in effect for the OZ program; the coronavirus-related extensions expired on March 31, 2021, and I do not expect the IRS to issue any more of them.
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How have the OZ tax benefits and deadlines changed due to the pandemic?
What are the latest extensions and changes?
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There have not been any updates on changes due to the pandemic since January of 2021. Notice 2021-10 extended investment timelines, substantial improvement window, working capital safe harbor delays, QOF reinvestment period extension and relief on the 90% investment standard/reasonable cause.
The IRS previously issued Notices 2020-39 and 2021-10, which relaxed some of the requirements for OZ compliance. Most of that relief has now expired. The only measure remaining is that any failure by a QOF to satisfy the 90% investment standard for any tax year will be disregarded if either: (i) the last day of the first 6-month period of the tax year, or (ii) the last day of the tax year, falls within the period beginning on April 1, 2020, and ending on June 30, 2021. Note that, under a literal reading, this relief can absolve the failure by a calendar-year QOF to meet the 90% test on Dec. 31, 2021, even though this date occurs after June 30, 2021. This is because the last day of the first six months of 2021 occurs on June 30, 2021 and, therefore, 2021 is described in clause (i) (keep in mind that the 90% test is an annual test -- under Code Section 1400Z-2(d)(1), QOFs measure their assets by taking the average of the percentage on the two testing dates).
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