New Reporting Requirements for Opportunity Zone Funds and Businesses

The newly passed One Big Beautiful Bill didn’t just expand the Opportunity Zone program — it completely overhauled the reporting requirements for funds and businesses that participate.

Whether you're an investor, fund manager, or business owner in an Opportunity Zone (OZ) or Rural Opportunity Zone (ROZ), this post breaks down the new rules so you can stay compliant — and avoid steep penalties.

The IRS Is Watching: Why These Changes Matter

The original Opportunity Zone program launched in 2017 with generous tax benefits — but was criticized for lacking oversight. This new law flips the script by requiring detailed, consistent reporting from:

  • Qualified Opportunity Funds (QOFs)

  • Qualified Opportunity Zone businesses

  • Rural Opportunity Funds and businesses

The IRS will now publish annual public reports on how funds are used, what communities are benefiting, and whether investments are actually creating jobs and housing.

Key Takeaways for 2025 and Beyond

Opportunity Zone Businesses Must Report to Their Funds

Any business that receives OZ or ROZ investments must provide detailed annual statements to their fund. This includes businesses that are:

  • Directly operated by the fund

  • Invested in via OZ stock

  • Held through OZ partnership interests

The statements must include all the data required for the fund to file with the IRS — from business type and asset values to location, employee count, and NAICS codes.

Funds Must Electronically File Comprehensive IRS Reports

Qualified Opportunity Funds and Qualified Rural Funds must now file detailed electronic returns annually (via magnetic media or machine-readable format). These returns include:

  • Fund structure and total assets

  • Names and tax IDs of portfolio companies

  • Property values (owned and leased)

  • Locations and residential unit counts

  • Full-time equivalent employee data

  • Investment amounts by business and census tract

  • NAICS codes for every trade or business

This data will also be shared with investors, who will receive a statement with details on their investments, including acquisition/disposition dates and amounts.

IRS Will Release Public Reports on OZ/ROZ Impact

The IRS must now publish annual summaries of the Opportunity Zone program's impact, including:

  • Total number of funds and assets held

  • Where investments are going (by census tract)

  • Breakdown of real estate vs. business investments

  • Job creation metrics and employment levels

  • Residential unit development

  • Affordable housing and poverty indicators

Starting in the 6th and 11th year after the law’s passage, the IRS will also publish semi-decennial economic impact reports, comparing changes in OZ tracts to similar non-OZ tracts. Metrics include:

  • Job growth

  • Poverty reduction

  • Housing affordability

  • Median income

  • Business formation

This adds real transparency to an area previously lacking hard data.

Separate Tracking for Rural Opportunity Zones

Qualified Rural Opportunity Funds will be subject to the same rules and penalties — but with separate IRS reporting and analysis focused on the unique characteristics of rural investments.

What This Means for You

If you’re involved in any Opportunity Zone investment, you must:

✅ Keep detailed records of assets, employees, and locations
✅ Ensure your QOF is collecting statements from all portfolio businesses
✅ File complete, accurate returns with the IRS on time
✅ Notify your investors with required statements
✅ Stay ready for new public scrutiny of fund performance

Need Help Navigating the New OZ Reporting Rules?

Our firm can help you:

  • Set up compliance systems for your fund or business

  • Prepare the new annual IRS forms and investor disclosures

  • Avoid costly penalties

  • Evaluate whether OZ or ROZ investments make sense for your tax strategy

Let’s talk before your next filing deadline.