November 17, 2021
Ways & Means subpanel holds Opportunity Zone hearing
The House Ways & Means Oversight Subcommittee November 16 held a hearing, "The Opportunity Zone Program and Who It Left Behind," that focused on potential improvements to the program, including more accurate data, a refundable tax credit element, and new qualification parameters. Reforming the program could be a subject of bipartisan cooperation on the Committee, based on member comments. Subcommittee Chairman Bill Pascrell (D-NJ) said several times that no one is proposing an end to the program, and some Republican members said they wanted to work with the chairman to increase its effectiveness.
An Opportunity Zone is a designated economically distressed community for which investors may defer capital gains tax on investments and exclude gain from taxable income based on holding period requirements. The issue has come back into focus with a Government Accountability Office (GAO) report released last week finding that IRS faces challenges in implementing plans to ensure compliance with the program's rules because they depend on data not readily available for analysis. It also said funds have attracted investments from high-wealth individuals, and some funds are organized as partnerships with hundreds of investors.
Testimony is available here.
Additional information is also available in the attached Tax Alert.
Ways & Means Opportunity Zone hearing