Even before the advent of P3s (public-private-partnerships), it was not uncommon for a governmental entity or a 501(c)(3) to enter into a joint venture with a for-profit, taxpaying entity. Sometimes these joint ventures take the form of either a state law partnership or a state law limited liability company (“LLC”). Most LLCs are taxed as … Continue Reading
When most bond advisors think of the types of projects that bond proceeds may be used for, they think of roads, bridges, hospital or university buildings, etc. I think it is safe to say that very few bond advisors visualize an ark, let alone a replica of Noah’s Ark. However, the City Council of Williamstown, … Continue Reading
Although this blog post has nothing to do with tax advantaged bonds, it does involve taxpayers, large sums of money, allegations of deceit and a strange saga in which the IRS has become embroiled. The story begins in 1999, when William Esrey, the CEO of Sprint Corporation at the time, and Ronald LeMay, COO of Sprint … Continue Reading
That is, according to certain U.S. lawmakers, who believe that private colleges and universities with 501(c)(3) status that have at least a $1 billion endowment should be subject to some extra rules and regulations. If these well-endowed private colleges and universities fail to abide by such extra rules and regulations, under the proposed legislation (which … Continue Reading
By permitting the issuance of tax-advantaged bonds, the federal government has provided an economic subsidy to state and local governments and other issuers of such bonds. In other words, the federal government is foregoing revenue in order to allow the issuers or conduit borrowers of tax-advantaged bonds to borrow at a lower cost. In December, … Continue Reading
We all know that the federal tax rules and regulations applicable to tax-exempt bonds are very complex. So are the federal and state securities laws. At times this is frustrating for bond advisors. However, we should remember that the federal and state securities laws are intended to protect investors/bondholders by requiring that all material facts … Continue Reading
The IRS recently issued TAM 201544025 (“TAM”) in which it held that a 501(c)(3) organization’s activities constituted unrelated business taxable income (“UBTI”). As explained in more detail below, UBTI may negatively impact the tax-exempt character of 501(c)(3) bonds. If you are a regular reader of this Public Finance Tax Blog, you already know that in … Continue Reading
The IRS recently announced that it will devote 50% of the Tax-Exempt Bond office’s (“TEB’s”) budget for its 2016 fiscal year (beginning October 1, 2015) to examinations. Accordingly, issuers and conduit borrowers of tax-advantaged bonds should be very interested in the newly revised Internal Revenue Manual (“IRM”) procedures addressing the Voluntary Closing Agreement Program (“VCAP”), … Continue Reading
My last blog post described two of the tax related benefits that an entity may receive if it is properly characterized as an “instrumentality” of a state or political subdivision for federal income tax purposes. It also described the six factors that the IRS takes into consideration when determining whether or not an entity is properly … Continue Reading
Probably not as many people as want to be a millionaire. However, being an instrumentality can also have lucrative benefits, without having to answer increasingly difficult trivia questions or having to deal with Regis Philbin. For example, entities qualifying as “instrumentalities” for federal income tax purposes obtain two significant tax benefits. First, an instrumentality is … Continue Reading
Disclaimer: This blog post was prepared by Cynthia Mog. The opinions expressed in this article do not reflect the views of Squire Patton Boggs (US) LLP. In fact, they do not reflect the opinions of the author either. Rather, this is a summary of information available on the omniscient Internet. As you may know, a … Continue Reading
My last blog entry discussed how the final regulations issued last December under the Patient Protection and Affordable Care Act (“ACA”) were mostly good news for charitable hospitals that benefit from the issuance of 501(c)(3) bonds. For example, under these regulations, only egregious violations by a charitable hospital of the requirements imposed under the ACA … Continue Reading
The Patient Protection and Affordable Care Act (“ACA”) imposes several new requirements on charitable hospitals. Charitable hospitals that benefit from tax-exempt qualified 501(c)(3) bonds were concerned that violations of these ACA requirements would either result in a loss of the charitable hospital’s 501(c)(3) status, or result in excessive private business use, either of which would … Continue Reading
