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The One Big Beautiful Bill Act (OBBBA), which made the Opportunity Zone program permanent also established detailed reporting obligations for Qualified Opportunity Funds (QOFs). It also imposes reporting requirements on the Qualified Opportunity Zone Businesses (QOZBs) owned by the QOFs.
Since their creation in 2017, Opportunity Zones have offered major tax benefits to investors who reinvest otherwise taxable gains into low-income areas designated as Qualified Opportunity Zones. Concerns have been voiced in the interim about the lack data to show whether these investments were truly creating jobs, housing, or economic growth as intended. Critics also worried about misuse—funds could claim tax breaks without fully meeting the requirements.
Beginning with tax years after July 4, 2025, every QOF (existing or new) must file an annual return with the IRS that includes:
- The fund's identity and structure (corporation or partnership).
- The value of its assets, and the portion of value of those assets that consist of Qualified Opportunity Zone property.
- Details for each QOZB in which it invests including the identity of the QOZB, the amount of the investment in the QOZB, the census tract location, whether property is owned or leased and the value of that property, NAICS business codes, and employment counts.
- The number of residential units owned or leased.
- The identity of anyone that disposes of investments during the year, including acquisition and sale dates.
The QOF must furnish a written statement to an investor who disposes of their interest during the year with the information about the disposition.
Similarly, QOZBs must provide the info to the QOFs that own equity in the QOZB so that the QOF can make its reports.
These rules are backed by strict penalties. Missing or incomplete reports may trigger penalties of $500 day, capped at $10,000 for smaller funds and up to $50,000 for large funds. Willful disregard raises penalties dramatically—$2,500/day up to $250,000.
Bottom Line: Funds and investors now need robust systems to track data and ensure compliance—or risk steep financial consequences.
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