FAST FACTS

• Congress created the Opportunity Zones incentive to spur investment in distressed communities. Taxpayers who invest in Qualified Opportunity Funds—which invest in zones—can get significant tax benefits.

• According to IRS, over 6,000 of these funds invested about $29 billion in Opportunity Zones through 2019. The incentive attracted investment in housing, renewable energy businesses, and other projects.

• IRS developed plans to ensure these funds comply with requirements. But its plans depend on data that isn't readily accessible—which could make it hard for IRS to find investors who aren't following the rules. We recommended addressing this risk.

The Opportunity Zone program, established in The Tax Cuts and Jobs Act of 2017, is a tax incentive, designed to encourage long-term private investment in low-income communities. The program essentially runs on two tracks – first, Governors in each state nominate opportunity zones, which are low-income community census tracts that could benefit from significant private investment. Second, once the zones are certified by the U.S. Treasury Department, interested private investors must invest in opportunity funds, specialized vehicles that can then be utilized to invest in the certified opportunity zones.

State Respondents' Views on Overall Impact of the Opportunity Zones Tax Incentive

Note: GAO surveyed government officials from the 50 states, Washington, D.C., and the five U.S. territories—American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands—and received 56 responses.