Step 4: The Annual Audit

Understanding the Annual CDE Audit
Understanding the Annual CDE Audit

Annual audit

 

 

The Audit Process

A crucial aspect of maintaining New Markets Tax Credit Program compliance is having an annual audit performed on the CDE’s financial statements by an independent accounting firm. While the word “audit” generally strikes fear in the heart of the taxpayer, in this case the annual audit is an important risk management check on the CDE’s operations. Remember that the CDE is exposed to considerably more risk than a traditional financial institution. CDE’s, by design, invest in riskier ventures and place less stringent requirements on borrowers and ventures seeking equity investments. Furthermore, while banks are now required under various regulations to conduct extensive due diligence on their loans and investments, there is no such regulation for CDEs…Download the PDF to learn more

 

Step 1: Applying for CDE Application

Step 2: The NMTC Application

Step 3: The Allocation Agreement

Step 5: Structuring Around State and Local Tax Issues

Step 6: NMTC Program Compliance