Towne Tip: What to Do When a Required Verification is Missing From the File

A tenant income certification with a missing verification is an incomplete certification. Under IRS Form 8823, line 11d, an incomplete certification is its own reportable finding, the same category used for a certification never provided at all. Examples you might already be familiar with is a household discloses a checking account and there are no bank statements or verification of the account in the file. Or a household member reports a new job and the file does not contain verification of the pay. The certification is not considered complete until all verifications exist, and verifying the information follows a required order.

The Hierarchy Comes From Your Allocating Agency

Allocating agencies set a required order of acceptable verification methods. Adoption of a specific order varies by agency and has changed over time as HOTMA's verification standards have rolled out unevenly across states. Find the exact order required for your property in your own allocating agency's program manual.

When Every Method Has Been Tried

When you are trying to verify the missing information, how you do that depends on if the certification is open and incomplete or if the certification was considered complete and has a subsequent signed Tenant Income Certification.

If this is an active certification, the household is currently being certified or recertified. The certification cannot be considered complete while the required verification is missing. Attempt the first method in your agency's required order. If that method produces the verification, use it to complete the certification and stop there. If it does not, record who was contacted, when, how, and what response was received, then move to the next method and repeat the same attempt and documentation.

If this is a completed file and management discovers a missing verification during an internal review, and the household still resides at the property, work through the hierarchy first, requesting the document directly from the household or the relevant third party. If the document has not been provided after several documented requests, check your lease and any tax credit addenda the household signed for a provision requiring the household to provide information needed for certification. If that obligation exists, use it to request the missing verification again. If it doesn't, this may be worth raising with your management team for future leases.

If the household has vacated and the verification cannot be obtained through any method, reach out to your compliance team or allocating agency. A vacated household with no remaining path to verification is a good reason to bring in additional support rather than sort it out alone.