Request to Designate Census Tract as Qualified O-Zone Denied

UIL: 1400Z.01-00
Release Date: 12/27/2019

Date: September 27, 2019

Refer Reply To: CONEX-119302-19

The Honorable Donald Norcross
Member, U.S. House of Representatives
10 Melrose Avenue, Suite 210
Cherry Hill, NJ 08003

Attention * * *:

Dear Representative Norcross:

I'm responding to your inquiry dated August 7, 2019, on behalf of your constituent, * * *. * * * asked about the * * * Census Tract * * *, which is currently designated as a qualified opportunity zone. Specifically, he asked if Census Tract * * * could be designated as a qualified opportunity zone in addition to Census Tract * * *. As an alternative, * * * asked if Census Tract * * * could replace Census Tract * * * as the qualified opportunity zone.

I'm sorry for the confusion * * * experienced trying to get clarification about the qualified opportunity zones.

Unfortunately, Section 1400Z-1 of the Internal Revenue Code (Code) provides only one determination period and one consideration period for the Department of Treasury and the IRS to certify and designate tracts as qualified opportunity zones. Section 1400Z-1 does not allow for any additional or revised determinations after the maximum allowed number of zones in a state or territory have been designated.

Section 1400Z-1 of the Code allows state chief executive officers (CEOs) to nominate certain low-income communities for designation as qualified opportunity zones. This nomination process was completed in 2018. State CEOs used Revenue Procedure 2018-16, 2018-9 I.R.B. 383, to guide them in the process of making these nominations. Under the Code and the revenue procedure, the CEOs of all states (including the District of Columbia and U.S. possessions) were required to make their nominations no later than March 21, 2018, unless the State CEOs requested an extension of the nomination period to April 20, 2018. The Code also requires the Secretary of the Department of the Treasury to use his discretion to certify these census tracts as opportunity zones once the nomination process is complete.

The Department of the Treasury completed the designation of qualified opportunity zones on June 14, 2018, based on a list of eligible census tracts nominated by State CEOs. On July 9, 2018, the IRS published Notice 2018-48, 2018-28 I.R.B. 9, which listed all designated qualified opportunity zones. Each state nominated the maximum number of eligible tracts the law allows, and these designations are final.

If you have any questions, please call me or * * * at * * *.

Sincerely,

William A. Jackson
Chief, Branch 5
Office of Associate Chief Counsel
(Income Tax & Accounting)