Squire Patton Boggs

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IRS Releases New “Issue Snapshot” on Single-Family Housing Bonds

The IRS has released another “issue snapshot,” which deals with qualified mortgage bonds (or, as they are often called in our lingo, single-family housing bonds). An issuer uses the proceeds of qualified mortgage bonds to make loans to private homeowners. Because of the private loan limitation, the bonds are private activity bonds. To be tax-exempt, then, the … Continue Reading

IRS Revises Rate for “Taxpayer Exposure” Penalty Calculations

When you enter into a closing agreement with the IRS to fix a problem with a tax-exempt bond issue, the IRS will often require a penalty payment in an amount relating to the “taxpayer exposure” on some or all of the bond issue. Taxpayer exposure “represents the estimated amount of tax liability the United States … Continue Reading

The “Opportunity Zone” Program – Moving Forward

The 2017 tax reform legislation created a new federal subsidy for investment in low-income communities, known as the “Opportunity Zone” program. (We previously covered it on the blog here.) The program allows taxpayers to defer gain from the sale of assets by investing the proceeds into an “Opportunity Fund,” which is a fund that invests … Continue Reading

“Issue Snapshots” and The Wayback Machine

The IRS recently sent out an email (to those of you brave enough to willingly put yourselves on a government email list – rather like those intrepid souls who voluntarily follow @CIA on Twitter), regarding its “Issue Snapshots” webpage. The email lists the latest Snapshots, but the full list can be found at the bottom … Continue Reading

New “Remedial Actions” for BABs and other Direct Pay Bonds and Long-term Leases of Bond-financed Property

The IRS has given us new “remedial actions” for issuers of build America bonds and other direct pay bonds and for long-term leases of bond-financed property.  These new rules are in Revenue Procedure 2018-26, and you can apply them immediately to cure the violations that the Revenue Procedure covers. The beauty of the remedial action … Continue Reading

What does “control” mean in the context of affiliated 501(c)(3) organizations?

The IRS recently issued Private Letter Ruling 201811009, which provides helpful insight into how the IRS construes the term “control” for purposes of determining whether two affiliated 501(c)(3) organizations are “related” for purposes of the definition of “refunding issue.” The ruling involved a 501(c)(3) university (“Seller”) that sold its medical center to another 501(c)(3) organization … Continue Reading

Solicitor General Asserts that States Can Require Online Vendors to Collect and Remit Sales/Use Tax on Online Retail Sales

In January, the Supreme Court granted a writ of certiorari in the case of South Dakota v. Wayfair (discussed here).  Wayfair, which will be argued before the Court on April 17, is a direct challenge to Quill Corp. v. North Dakota, in which the Supreme Court held that a vendor does not have to collect … Continue Reading

Tax Reform Creates “Opportunity Zones” – A New Tool for Economic Development, but States must Act Quickly 

Notwithstanding all the doom and gloom around these parts about “the bill formerly known as the Tax Cuts and Jobs Act” (final name pending conclusion of sponsorship negotiations),[1] the final legislation created a new tool for economic development in low-income communities, called the “Opportunity Zone” program. The program provides incentives for taxpayers to invest in … Continue Reading

Why did the House want to repeal tax-exempt private activity bonds?

Happy New Year to all. When we last spoke, we were all breathing a sigh of relief that tax-exempt private activity bonds were spared the sword in the final tax reform legislation, and we poured out a little eggnog for our old friend, the tax-exempt advance refunding bond, gone too soon. But based on comments from … Continue Reading

Final Tax Reform Legislation Saves PABs and Stadium Bonds, Kills Advance Refundings and Tax Credit Bonds

Signaling the end of our six-week ride in a runaway cement mixer, the Conference Committee for the Tax Cuts and Jobs Act has released its Conference Report, which represents a compromise version of the House and Senate-passed versions of the Act. Each chamber has the votes to enact the compromise bill; they’ll do it, and … Continue Reading

Inconceivable! Congressional Repeal of Tax-Exempt Advance Refunding Bonds Might Not Generate the Revenue that Congress Thinks it Will

White smoke rises in the east! Later today (Friday), it is expected that the House-Senate Conference Committee will release a final draft of the Tax Cuts and Jobs Act. Consistent with what was in both the Senate version (discussed here) and the House version (discussed here), it is further expected that the draft released by … Continue Reading

Advance Refundings, Paygo, and BABs

For those of you who were enjoying Thanksgiving last week and missed the Senate Finance Committee’s release of its proposed legislative text of the Tax Cuts and Jobs Act, see below for how succinctly tax-exempt advance refunding bonds can be removed from the Code: Yes, I’m cheating a little; there are a few more lines … Continue Reading

The future for the municipal bond tax exemption is bright following the release of the unified framework for tax reform.

Efforts to overhaul the Internal Revenue Code have been spearheaded thus far by a group of Republicans referred to as the “Big Six.”[1]  Earlier today, the Big Six released a “unified framework to achieve pro-American, fiscally-responsible tax reform” (the “Framework”).  The Framework proposes many changes to the U.S. tax system, but does not propose any … Continue Reading

Someone Left the Crayons Out, and Now the Tax Lawyers Are Drawing Pictures (updated)

Timing, as they say, is everything. The tax-exempt bond rules are full of deadlines and sunsets, both before and after the issue date and before and after the project is finished. Click above for a diagram of how some of these rules work together. It’s by no means exhaustive, but certainly exhausting. Maybe you’ll find it … Continue Reading

SLGS! (For Now)

Treasury has re-opened the sale of SLGS, now that the debt limit has been lifted through December 8. The SLGS window likely will close again around December 8, unless Congress takes further action. (Though the strictures of legal ethics and of logic would counsel us against insinuating that we had anything to do with it, we … Continue Reading

SLGS Forever?

For those of you keeping track, the SLGS window has been closed since March 8, 2017. With the recent discussions in Washington regarding a three-month debt limit increase, it is possible that the SLGS window will soon reopen, at least for a short time. (For prior coverage of the history of the SLGS window opening … Continue Reading

Treasury Clarifies Effective Date of Revised Definition of ‘Available Amount’

On July 18, 2016, the Treasury Department published final regulations on non-issue price arbitrage restrictions (the “Final Regulations”).  A copy of the Final Regulations is available here.  Since that time, the mid-afternoon naps of issuers, tax lawyers, and possibly Sean from Portlandia have been improved by reading my “comprehensive” blog post on the Final Regulations. … Continue Reading

Oh Great; More Issue Price Talk

Various industry groups and issuers from around the country have re-submitted comments applauding Treasury for including the proposed political subdivision regulations among those on the chopping block, following the President’s Executive Order 13789 to eliminate burdensome tax regulations. Not surprisingly, the style of most of those submissions has been simple and thematically consistent: “Good Job. … Continue Reading
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