Lisa Starczewski, shareholder in the firm's Tax section and chair of the Opportunity Zones Practice Group, comments on the IRS and Treasury Department's announcement that there are no plans to issue a third round of proposed regulations for the opportunity zone tax breaks, but rather perhaps issue sub-regulatory guidance to address remaining uncertainties. Read more in Bloomberg Tax's article "No Plan for Third Round of Opportunity Zone Rules, Officials Say."
The government still needs to lay out how it plans to handle funds that have been operating for years as if they are in compliance with the tax breaks’ guardrails, only to be deemed not truly a qualified opportunity fund well into the development of the projects they are financing, said Lisa Starczewski, shareholder of Buchanan, Ingersoll & Rooney PC.
“Are you going to go back and put the deferred gain on the original return and pay interest and penalties?” she said. “There’s just a question as to how they’re really going to unwind transactions in abusive situations or if they audit and find that the requirements weren’t met.”