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Public Finance Matters Updates on recent public finance and municipal bond developments

Tag Archives: IRS

IRS Clarifies New Management Contract Safe Harbors

Posted in Tax/arbitrage

By MAXWELL D. SOLET and CHRISTIE MARTIN In August, 2016, the IRS issued Revenue Procedure 2016-44, the first comprehensive revision of its management contract safe harbors since Revenue Procedure 97-13.  Rev. Proc. 2016-44 (see our description here) built upon and amplified principles laid out in private letter rulings issued over many years and in Notice… Continue Reading

Treasury/IRS Provide Early Holiday Present: Final “Issue Price” Regulations Released

Posted in Tax/arbitrage

By CHRISTIE MARTIN and MAXWELL D. SOLET After two sets of proposed regulations, Treasury and IRS have now released final regulations on the definition of “issue price” for purposes of arbitrage investment restrictions that apply to tax-advantaged bonds (the “Final Regulations”) and it appears that the third time’s the charm. Practitioners are particularly praising the… Continue Reading

ABLE Programs and Beneficiaries Boosted by Helpful Guidance from IRS and Social Security Administration

Posted in Section 529 plans

By LEN WEISER-VARON The Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE Act), one of the few recent examples of bipartisan cooperation on a new category of tax and budget expenditure, is both well-intentioned in its principles and cumbersome in its details, another example of the proposition that a camel is a… Continue Reading

Helpful News from IRS on Student Loan Bonds

Posted in Tax/arbitrage

By MAXWELL D. SOLET On November 13, the IRS issued Notice 2015-78, providing favorable guidance on topics of interest to providers of “supplemental” or “alternative” student loans financed with tax-exempt bonds and to underwriters of such student loan bonds. Such guidance confirms that loans financeable under such programs include (i) parent loans as well as… Continue Reading

The IRS’s Proposed ABLE Regulations: Obstacles to Launching State Programs, and Potential Solutions

Posted in Regulatory Proposals

By LEONARD WEISER-VARON The IRS’s recently-published proposed regulations for Section 529A qualified ABLE programs have taken some wind out of the sails of state program administrators and potential program managers who had hoped for regulations that hewed closer to the requirements in effect for qualified tuition programs under Section 529, on which Section 529A was… Continue Reading

IRS Revamps Proposed Issue Price Definition for Municipal Bonds

Posted in Tax/arbitrage

By MAXWELL SOLET and CHRISTIE MARTIN Treasury and IRS today announced a decision to withdraw the much-criticized portion of the notice of proposed rulemaking published in the Federal Register on September 16, 2013 (the “2013 Proposed Regulations”) related to the definition of issue price for tax-advantaged obligations and to propose a revised definition of issue… Continue Reading

IRS’s Proposed Section 529A Regulations for ABLE Programs: A Mixed Bag

Posted in Regulatory Proposals

By LEN WEISER-VARON The IRS today published, right on deadline, its proposed regulations relating to Section 529A state-sponsored “qualified ABLE programs,” under which  tax-advantaged investment accounts may be established to fund future “qualified disability expenses” of eligible disabled individuals. The regulations are detailed and this posting will not attempt to summarize them in their entirety. Rather,… Continue Reading

IRS Green Lights Section 529A ABLE Disability Programs

Posted in Tax/arbitrage

By LEN WEISER-VARON Pi Day comes but once a century, on 3/14/15. The Internal Revenue Service receives praise approximately as frequently. But the IRS deserves applause for its Notice 2015-18, released March 10, 2015, giving the green light to states to proceed with the establishment of tax-free investment programs for the disabled under new Section… Continue Reading

IRS Provides Increased Flexibility on Management Contracts for Tax-Exempt Bond-Financed Property

Posted in Tax/arbitrage

By Maxwell D. Solet On October 24, 2014, the Internal Revenue Service issued Notice 2014-67 (the “Notice”), which provides important guidance and increased flexibility for issuers and conduit borrowers of tax-exempt bonds regarding contracting with private parties in a manner that avoids “private use” by such parties of bond-financed facilities. The Internal Revenue Code restricts private… Continue Reading

IRS Warns That Financial Restructurings Can Jeopardize Tax-Exemption of Bonds

Posted in Tax/arbitrage

By JEREMY A. SPECTOR The IRS is planning on sending out letters (“Letters”) over the next few months to several hundred issuers who have experienced covenant or payment defaults from 2007 to the present. The Letters remind issuers of their tax compliance responsibilities in the context of a restructuring and encourage them to self-police compliance… Continue Reading

IRS Announces Closing Agreement Process for At-Risk Student Loan Bonds

Posted in Tax/arbitrage

The IRS has announced the procedures, and settlement cost methodology, for issuers seeking to preserve the tax-exemption of those student loan bonds that are at risk of being declared taxable due to the issuer’s attempted compliance with arbitrage restrictions using a loan-swapping technique that the IRS has determined is ineffective.  The closing agreement arrangements, which are… Continue Reading

Recent Developments Regarding Issuer Responsibility for Reviewing Initial Offering Prices of Bonds

Posted in Tax/arbitrage

BY JEREMY SPECTOR Following the advent of Build America Bonds (BABs) in 2009 and securities law rulemaking that has resulted in the posting of virtually instantaneous trading data on the EMMA website (msrb.emma.org) hosted by the Municipal Securities Rulemaking Board (MSRB), the IRS has repeatedly expressed concerns about how initial offering prices (a/k/a “issue prices”)… Continue Reading