Treasury proposes OZ 2.0 reporting rules

On September 11, 2026, Treasury and the IRS published proposed regulations REG-116506-25. The proposal sets out how the reporting requirements in the OBBBA will work in practice. It runs 121 pages.

These are proposed rules. They would apply to returns and statements due after final regulations are published, and current rules govern until then. Comments are due October 26, 2026.

Three changes matter most for the annual work on a fund.

Every QOZB reports to its QOF

This is the biggest change in the proposal. Under new Section 6039L, each QOZB would furnish an annual statement to every QOF that holds an interest in it. The statement is signed under penalties of perjury.

The deadline is early. The statement is due on the first day of the second month after the QOZB's year end. A calendar-year QOZB delivers it by February 1. Many QOZBs have not closed their year-end books by that date.

The statement carries property-level detail. For each census tract, the QOZB reports the physical address, NAICS code, real property value, residential units, and full-time equivalent employees. It also reports its tangible property totals, any substantial improvement underway, and whether it is using the working capital safe harbor.

The QOZB attests to its own qualification. It confirms that it met each QOZB test for the year, or it discloses that it is using its cure period. A late or incorrect statement carries a penalty of $250.

Form 8996 becomes its own return

Form 8996 would stand alone. It would become an annual information return, filed electronically and separately from the fund's tax return.

A fund certifies once. The QOF self-certifies on its first-year Form 8996. Every later year is an annual report.

The form asks for much more. It carries the same tract-level detail as the QOZB statement, for the fund's own property and for each QOZB it holds. Real property values and residential units are reported as of December 31, including for fiscal-year funds.

Late filing carries a daily penalty. The amount is $500 per day. It is capped at $10,000 per return, or $50,000 for a QOF with more than $10 million in gross assets. Intentional disregard raises both figures. Reasonable cause relief remains available.

Investor statements and leaving the program

Investor statements have a fixed due date. A QOF would furnish a statement to any investor with an inclusion event during the calendar year. The statement is due March 1.

Decertification follows one exclusive procedure. A fund that chooses to stop being a QOF needs written documentation made at the time of the decision, such as meeting minutes. It notifies every investor within 15 days and files a final Form 8996. Without that documentation, the decertification is invalid and the entity remains a QOF.

Decertification is costly for investors. It is an inclusion event for every owner, and the 10-year exclusion is lost from that date.

Rural fund reporting is still reserved. Treasury left the QROF rules for a later regulation.

What to have ready for every QOZB

These items are not required yet. Most of them sit with the QOZB or its property manager, and they take time to collect.

• Address and census tract. One entry for each property the QOZB owns or leases.

• NAICS code. The code that describes the business in each tract.

• First purchase or lease date. The date ties the business to a zone designation period.

• Substantial improvement status. Whether one is underway, and the date it began.

• Real property value at December 31. One method, documented, applied every year.

• Residential units. Units with a certificate of occupancy, by tract.

• Employee count. Full-time equivalents on the QOZB's own payroll.

• Working capital safe harbor. Whether a plan is in use, and when it is expected to end.

• A signer. The person at each QOZB who will sign under penalties of perjury.

• A February 1 calendar. A QOZB year-end close that finishes in January.

  
  

OZXpro is the most sophisticated platform for Opportunity Zone data, records, and compliance. It keeps fund, QOZB, and investor records in one system of record, with the supporting documents behind every figure. We will publish an update when Treasury finalizes the rules.

This briefing summarizes proposed regulations and is provided for informational purposes only. Proposed regulations are subject to change before they are final. Nothing here is legal, tax, or investment advice, and you should verify all references against current IRS guidance and consult counsel before acting.

Source: Treasury and IRS, REG-116506-25, published in the Federal Register on September 11, 2026. Read the full proposal: federalregister.gov/d/2026-18574. Prepared by OZXpro.