The Qualified Opportunity Zone Program: Thoughts on the Long-Awaited Treasury Guidance11.14/Alert
As laudable as the goals of the QOZ program might be, the statutory provisions enacted by Congress setting forth the program benefits and requirements were written in such haste that they suffer from a mix of poor drafting, incorrect and/or ambiguous cross references, and a general failure to think through a real-world implementation of the program. The lack of clarity caused the program to get off to a slow start as prospective program participants sat on the sidelines while Treasury assumed the unenviable task of crafting guidance that would hold true to the perceived intent of Congress (itself not always clear), fill in the gaps in the statutory language and outline a coherent program structure without crossing the line into becoming a substitute legislature. The first installment of that guidance was released on October 19, 2018 in the form of Proposed Regulations (the “Proposed Regulations”) and accompanying Revenue Ruling 2018-29. While many questions remain unanswered, Treasury has taken an admirable first step in turning a Jackson Pollock painting into a portrait.
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