Notwithstanding repeated assurances from all corners that tax reform wouldn’t touch the exclusion from gross income of interest on tax-exempt bonds (here, here, and here), proposed legislation would touch it indeed, and quite profoundly. The opening statement in what is sure to be a long legislative discussion on tax reform came this morning, as the … Continue Reading
The title of this post is taken from an observation that a client once made when the strictures of the notice, hearing, and approval requirements set forth in Internal Revenue Code Section 147(f), which with limited exceptions apply to all issues of tax-exempt private activity bonds, worked to prevent a hoped-for use of proceeds of … Continue Reading
One of the many recent targets of Twitter criticism from President Trump has been the internet retailer Amazon. Presumably after being informed by his staff that jobs in the retail industry constitute a much more significant share of national employment than those in coal mining (or after hearing about it on CNN), Mr. Trump posted … Continue Reading
July 7, 2017 witnessed a once-in-a-career moment for any tax practitioner. On that date, the Treasury Department released Notice 2017-38, which acknowledged that eight regulatory projects are unduly burdensome and should be reconsidered for modification or repeal – a rare display of administrative modesty. Included in the list of burdensome regulations are the proposed regulations … Continue Reading
Three score and thirteen years (and one day) after D-Day (June 7, 2017, for the non-history-buffs), the new regulations that prescribe the methods for determining the issue price of tax-advantaged bonds take effect. Of the various methods for determining the issue price of tax-advantaged bonds, the hold-the-offering-price method is the only one that allows an … Continue Reading
Joel Swearingen reported last week that the National Association of Bond Lawyers (“NABL”) recently released exposure drafts of model issue price certificates that reflect the final Treasury regulations on issue price that take effect for tax-advantaged bonds sold on or after June 7, 2017. As Joel reported, the model issue price certificates cover the direct … Continue Reading
Poker has a well-established hierarchy of winning hands. If you’re holding a full house, you’ve got a right fine hand, but if you reach for the pot when the last bets are called and another player has four deuces, you will at best be the object of ridicule and at worst the subject of grievous … Continue Reading
On January 13, 2017, the Internal Revenue Service released Private Letter Ruling 201702009. The IRS held in this private letter ruling that the existence of unspent “available project proceeds” would not cause an issue of Build America Bonds (“BABs”) to lose their status retroactively when they are redeemed with the proceeds of tax-exempt bonds.[1] The … Continue Reading
Dear Internal Revenue Service: At the Bond Attorneys’ Workshop this past October, certain of your officials indicated that you will be considering the issuance of clarifications and amendments of Revenue Procedure 2016-44 to address concerns that have been raised about particular provisions of this Revenue Procedure (which, by and large, is an excellent piece of … Continue Reading
Revenue Procedure 2016-44 is laudable because it significantly expands the scope of management contracts that can satisfy the safe harbor from private business use of facilities financed with proceeds of tax-advantaged bonds. It also makes much more feasible the use of tax-advantaged bonds in public-private partnership arrangements. Revenue Procedure 2016-44 does, however, effect one curious … Continue Reading
On August 15, 2016, the Treasury Department released its 2016 – 2017 Priority Guidance Plan (the “Plan”). Tax-exempt bonds are the last category in the Plan, but the Plan lists the priority guidance categories in alphabetical order. Had these categories been listed in order of esteem, we know that tax-exempt bonds would have been [INSERT … Continue Reading
On May 27, 2016, the National Office of the Internal Revenue Service (“IRS”) released Private Letter Ruling (“PLR”) 201622003. PLR 201622003 continues the trend of favorable PLRs issued by the IRS on the question of whether, under a facts-and-circumstances analysis, a management contract that fails to satisfy a Rev. Proc. 97-13 safe harbor from private … Continue Reading
With the recent issuance of the proposed regulations that would redefine the term “political subdivision” for purposes of determining which entities can issue tax-exempt bonds under Section 103 of the Internal Revenue Code, as amended (the “Code”), the answer to this seemingly rhetorical question is “yes,” at least according to the Treasury Department. This is … Continue Reading
Suppose you, or a friend, issued build America bonds or another form of direct payment subsidy bonds in 2009 or 2010, as permitted by the American Recovery and Reinvestment Act, to do your bit to stimulate aggregate demand during the depths of the Great Recession. You, or your friend, as applicable, did not, however, include … Continue Reading
We’ve previously posted about the City of Cleveland income tax refund claims brought by two former National Football League players, the grant of those refund claims by the Ohio Supreme Court, and the denial of Cleveland’s petition for certiorari by the United States Supreme Court. As detailed in these prior posts, the Cleveland income tax … Continue Reading
We previously posted about City of Cleveland income tax refund claims brought by two former National Football League players that were at the time pending before the Ohio Supreme Court. The former players asserted that the portion of a professional athlete’s salary that should be subject to Cleveland income tax should be the product of … Continue Reading
On October 27, 2015, the Treasury Department published final regulations on the allocation of tax-exempt bond proceeds to mixed use projects and related topics (the “Allocation Regulations”). The Allocation Regulations finalize proposed regulations that were issued in 2006 and 2003. Click here for a copy of the Allocation Regulations, and read below for a high-level summary … Continue Reading
Under Section 148 of the Internal Revenue Code of 1986, as amended (“Code” – it’s been almost a year since we started this blog, and our devotion to defined terms remains unswerving), the gross proceeds of a tax-exempt bond issue cannot be invested at a yield that is materially higher than the yield of bond … Continue Reading
During his NBA playing career, former Philadelphia 76ers point guard Allen Iverson was known as The Answer. He famously minimized the importance of practice compared to official games, making it clear that he was compensated for playing in games, not for practicing. For income tax purposes, the City of Cleveland agrees with Mr. Iverson, taxing nonresident … Continue Reading
On October 30, 1975, The Daily News published one of the most famous headlines in American history – Ford to City: Drop Dead – to paraphrase President Ford’s refusal to extend federal financial assistance to New York City to prevent the City from declaring bankruptcy. Nearly 40 years later, a different branch of the federal … Continue Reading
We’ve previously reported that the Internal Revenue Service (IRS) has issued eight private letter rulings under Internal Revenue Code (Code) Section 54A(d)(2)(B)(iii) that grant an extension of the three-year expenditure period that applies to an issue of qualified tax credit bonds (QTCBs). An issuer of QTCBs must reasonably expect on the issuance date of the … Continue Reading
The Bond Buyer recently published a commentary ($) prepared by Squire Patton Boggs’ lawyers Mike Cullers and Roddy Devlin, on the proposal in the Obama Administration’s federal government budget for fiscal year 2016 to expand exempt facility bonds to include a new category – Qualified Public Infrastructure Bonds. Please see this commentary for a primer on the applicable … Continue Reading
Sometimes, the most difficult part of drafting a blog post is conjuring up a title. This post deals with a case involving state income tax credits that was argued before the United States Supreme Court on November 12, 2014 and that will be decided by the end of the Court’s term in June 2015. If … Continue Reading
Although The Bond Buyer has previously reported that the IRS has audited a number of tax-exempt bond issues that involved total return swaps ($) and that the IRS has declared to be taxable an ostensibly tax-exempt bond issue that involved a total return swap ($), the IRS had until a public release on January 9, … Continue Reading
