Treasury, IRS propose form to collect data about investments in opportunity zones

Treasury, IRS propose form to collect data about investments in opportunity zones
© Greg Nash

The Treasury Department and IRS on Thursday released a draft form that is designed to collect information about investments made under the "opportunity zone" provision in President TrumpDonald John TrumpThis week: House kicks off public phase of impeachment inquiry Impeachment week: Trump probe hits crucial point Judd Gregg: The big, big and bigger problem MORE's tax-cut law.

The release of the form comes amid concerns from lawmakers that the opportunity-zone program doesn't have enough guardrails to ensure that it is actually meeting its intended goal of revitalizing economically distressed areas.

ADVERTISEMENT

“This is an important step towards a thorough evaluation of the Opportunity Zone tax incentive,” Treasury Secretary Steven MnuchinSteven Terner MnuchinOn The Money: US paid record .1B in tariffs in September | Dems ramp up oversight of 'opportunity zones' | Judge hints at letting House lawsuit over Trump tax returns proceed Democrats ramp up oversight efforts over 'opportunity zone' incentive White House to add two aides to lead impeachment messaging MORE said in a statement. “We want to understand where Opportunity Zone investments are going and strengthening the economy so that investors and communities can learn from the successes of this bipartisan, pro-growth policy.”

Trump's 2017 law created a program called opportunity zones that allows investors in designated economically distressed areas to receive capital gains tax breaks. 

The opportunity-zone provision has some bipartisan support, but there have also been concerns that the program does not have enough transparency, and that it will not effectively target investments to where they are most needed.

The New York Times published a story last weekend reporting that Mnuchin instructed Treasury to take an action relating to the opportunity-zone program that benefited former "junk bond king" Michael Milken. The article has raised concerns among Democrats. Treasury and Milken have both pushed back strongly against the Times story.

Policymakers have for months had an interest in boosting reporting requirements about opportunity zones. 

When Treasury released proposed regulations on opportunity zones in the spring, the department also released a document requesting comments from stakeholders about how best to measure the economic impact in opportunity zones.

A bipartisan group of lawmakers, including Sens. Tim ScottTimothy (Tim) Eugene ScottPompeo to speak in South Carolina on Veterans Day The Hill's 12:30 Report: House takes major step by voting to approve impeachment procedures Treasury, IRS propose form to collect data about investments in opportunity zones MORE (R-S.C.) and Cory BookerCory Anthony BookerThe Hill's Campaign Report: Bloomberg looks to upend Democratic race Poll: Biden support hits record low of 26 percent The Hill's 12:30 Report: Trump demands Bidens testify MORE (D-N.J.), introduced legislation earlier this year to require Treasury to collect data on the impact of the program in underserved communities, and to report that information annually to Congress. It's unclear exactly if or when the bill will get a vote.

Treasury's draft form, which is designed for the 2019 tax year, includes new reporting requirements for funds that make investments in opportunity zones. Under the form, funds would be required to report the employer identification numbers of each business in which the fund has a stock or partnership interest, the census tract in which the business has property, and the value of the investment apportioned to each census tract. Funds would also be required to report information about the value of business property that they own or lease directly.

Treasury said the information it wants funds to report would allow it to track the amount of investments that different census tracts receive over time. Treasury added that policymakers would be able to use the data — along with income and employment numbers — to evaluate the effects of the opportunity zone tax breaks.

Sen. Ron WydenRonald (Ron) Lee WydenFalling investment revives attacks against Trump's tax cuts Overnight Health Care: CDC links vitamin E oil to vaping illnesses | White House calls Pelosi drug price plan 'unworkable' | Dem offers bill for state-based 'Medicare for All' White House says Pelosi plan to lower drug prices 'unworkable' MORE (D-Ore.), the top Democrat on the Senate Finance Committee, said in a statement that “requiring taxpayers to prove they’re actually following the rules of the Opportunity Zone program is a positive first step, but it’s one that should have been taken two years ago, instead of prioritizing rules to let the Treasury secretary’s cronies profit at taxpayers’ expense."

"The Opportunity Zone program has been operating without any effort to ensure compliance and that’s inexcusable,” he added.

Booker, who is running for president, said in a statement issued by his Senate office that Treasury took a step toward putting in place transparency measures, but that "in order for the tax incentive to truly fulfill the type of economic development intended from the original legislation, these oversight requirements must be much more comprehensive and the Administration has a long way to go."

Booker and Reps. Emanuel Cleaver (D-Mo.) and Ron KindRonald (Ron) James KindDemocrats ramp up oversight efforts over 'opportunity zone' incentive Treasury, IRS propose form to collect data about investments in opportunity zones The Hill's Morning Report - Presented by Better Medicare Alliance - Dems unveil impeachment measure; Vindman splits GOP MORE (D-Wis.) also sent a letter to the Treasury Department inspector general on Thursday, asking for an investigation into allegations of misconduct by senior Treasury officials in implementing the opportunity zones provision.

--Updated at 5:15 p.m.