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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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While additional regulations are still not available, on December 20, 2018, the Joint Committee on Taxation released its “<a href="https://admin.thompsonhine.com/wp-content/uploads/1345/doc/Joint_Committee_on_Taxation_General_Explanation_of_Public_Law_115-97.pdf" target="_blank" rel="noopener">General Explanation of Public Law 115-97</a>.” This publication includes the statement, “The provision intends that the certification process for a qualified opportunity fund will be carried out in a manner similar to the process for allocating the new markets tax credit. The Secretary is granted the authority to administer this process.” The reference to the NMTC process to carry out the QOZ fund certification process is surprising. To the extent that consideration is being given to a governmental pre-approval process to accomplish certification, or to reporting beyond submitting some general reporting information, such approach would be completely contrary to previous information indicating that the funds would be “self-certified” using an IRS form.

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In addition, a New York Times article titled “<a href="https://www.nytimes.com/2018/12/12/us/politics/trump-opportunity-zones-tax-cut.html" target="_blank" rel="noopener">Trump to Steer More Money to ‘Opportunity Zones’</a>” included the following reference in the very last paragraph, indicating that more paperwork may be required to participate in the QOZ fund program:

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“An administration official who spoke on the condition of anonymity said Tuesday that the coming regulations would include a provision that analysts at the&nbsp;Brookings Institution, the&nbsp;Center for American Progress and elsewhere have pushed for: reporting requirements for investments in the zones, which would allow economists to evaluate whether the program was having an impact.”

The Thompson Hine Qualified Opportunity Zones team submitted information (<a href="https://admin.thompsonhine.com/wp-content/uploads/1345/doc/Frank_Ferrante_Email_to_Senate_Aides.pdf" target="_blank" rel="noopener">read this communication</a>) to the legislative aides for tax issues of Ohio Senators Portman and Brown (both of whom are on the Senate Finance Committee) to make them aware of the Joint Committee language. The QOZ team will continue to provide updates on QOZs as they become available.

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For more information, including a list of our Qualified Opportunity Zones team members, please visit the <a href="https://www.thompsonhine.com/services/qualified-opportunity-zones">Qualified Opportunity Zones page</a> on our website.

<em>This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel. </em>

<em>This document may be considered attorney advertising in some jurisdictions.</em>

Joint Committee on Taxation Raises Questions Regarding Qualified Opportunity Fund Certification Process