Hope you all had a nice summer – the blog is officially back from summer break. The Hutchinsons had a good one; we took Charlie to visit his grandparents at the beach in Pensacola, FL, where he went to Waffle House for the first time, and to visit his great-grandparents in Clinton, MS, where he … Continue Reading
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
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 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
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
Our tax and public policy colleagues have prepared a newsletter that illustrates some of the key take-home points for businesses based on our experience of the first few months after US tax reform. While US tax reform may not have been all that the business community hoped for, it has given taxpayers, both in the … Continue Reading
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
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
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
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
With the flurry of news regarding how tax-exempt bonds were affected by the Tax Cuts and Jobs Act (“TCJA”), some of you may have missed what else was included in the TCJA. Here are six things a 501(c)(3) organization should know (other than that TCJA did not eliminate tax-exempt qualified 501(c)(3) bonds): Fewer individuals will … Continue Reading
Last week, all of my dreams came true when I had the good fortune of going to Walt Disney World with my family. In addition to watching my kids train to be Jedi Knights, I had the opportunity to meet a number of Disney characters, including Cinderella. In so doing, I was reminded that although … Continue Reading
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
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
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
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
Are we having fun yet? To add further stress to the advance refunding issues that everyone is scrambling to close by the end of the year, subscriptions for SLGS will not be available on or after December 8, if not earlier. The most recent suspension of the application of the federal debt ceiling expires on … Continue Reading
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
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
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
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
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
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
The IRS recently released PLR 201726007, the first private letter ruling to interpret the revised management contract safe harbor in Rev. Proc. 2017-13. On one level, the PLR is quite straightforward – it concludes that a teaching agreement between a hospital and a school to provide clinical practice for pharmacy students does not result in … Continue Reading
