With stories about stimulus and relief from COVID-19 swirling, municipal bond industry groups are springing into action to help Congress and Treasury help us all. NABL sent a letter on Sunday to Congress and Treasury, asking for broad relief on a number of tax topics affected by COVID-19. The request is stated in broad strokes … Continue Reading
Yes, The Thing touches everything. COVID-19 affects the muni bond world in some fairly obvious ways. The general mandate is “everybody do less.” Decreasing activity in general translates to decreased business revenues and decreased tax revenues, which means less money available to repay bonds. This has set the disclosure world ablaze, as securities lawyers ponder … Continue Reading
Early in my career, I learned to dread telling people that I was a lawyer because when I explained the niche practice of public finance tax law, their eyes started to get sleepy, then their eyes started to glaze over. That was usually when I would blurt out “I help finance airports, hospitals, schools, and … Continue Reading
The IRS has issued proposed regulations that allow issuers to replace LIBOR rates associated with their bonds and swaps without triggering a reissuance of the bonds or a deemed termination of the swaps. The replacement rate must be a “qualified rate,” which includes the Secured Overnight Financing Rate (“SOFR”). A rate isn’t a “qualified rate” … Continue Reading
Earlier this month, we described Senate Bill 1763, which would authorize a new type of exempt facility bond to be issued for “qualified carbon capture facilities.” Well, on July 19, 2019, freshman House Republican Tim Burchett of Tennessee proposed the Carbon Capture Improvement Act, H.R. 3861, the text of which is identical to the Senate … Continue Reading
Treasury has announced that, after what seemed like a forever long hiatus, effective August 5, 2019, at 12:00 noon eastern, it will reopen the SLGs window. Treasury can reopen the SLGS window because of the enactment of the Bipartisan Budget Act of 2019, which suspends the application of the federal debt ceiling until July 31, … Continue Reading
On June 10, 2019, Senators Michael Bennet (D-CO) and Rob Portman (R-OH) introduced Senate Bill 1763 (the “Carbon Capture Bill”), which, if passed, would allow the issuance of exempt facility bonds for “qualified carbon dioxide capture facilities.” The Carbon Capture Bill has bipartisan support as this bill encourages continued use of carbon-generating natural resources by providing … Continue Reading
On May 22, 2019, the IRS issued IRS Notice 2019-39 (the “Original Notice”), which sought to bring efficiency and uniformity to guidance on the current refunding of certain bonds issued under current and future “targeted” tax-exempt bond programs. While the Original Notice set forth helpful guidance on the tax-exempt current refunding of bonds issued under … Continue Reading
The Opportunity Zone program was created by the 2017 Tax Cuts and Jobs Act (which we have previously written about here and here), to allow investors the “opportunity” to defer paying tax on gains from selling property by investing the proceeds from the sale into an Opportunity Zone Fund. The IRS issued a first round … Continue Reading
On April 3, 2019, the IRS published Rev. Proc. 2019-17, which provides that multifamily housing projects (or, for those of you who prefer Grey Poupon, “qualified residential rental projects”) won’t violate the general public use requirement even if the landlord offers units of the project to certain specific groups. Congress had made this point clear for low-income … Continue Reading
This Thursday and Friday, the National Association of Bond Lawyers, under the newly created “NABL U” umbrella, will be holding “The Institute” (formerly known as the Tax and Securities Law Institute) in Bonita Springs, FL. Those attending will be treated to in-depth discussions of lingering questions from the Tax Cuts and Jobs Act, the just-now-effective … Continue Reading
You have been waiting all weekend to hear the news, so we will get straight to the point. It took three years, but the IRS finally corrected the brain-melter that we posted a few days ago, making fairly comprehensive changes to Part 4, Chapter 81, Section 6 of the Internal Revenue Manual (IRM 4.81.6), titled … Continue Reading
Here’s a little puzzle for you, from that eternal font of delight, the Internal Revenue Manual. The Internal Revenue Manual illustrates how an issuer should present-value or future-value penalty amounts in a VCAP or in an audit: [A] closing agreement expected to be executed on January 15, 2016 includes amounts corresponding to future tax … Continue Reading
The March 1 deadline for submitting comments on the proposed reissuance regulations to the IRS is coming up fast. We make a general comment here – the existing guidance contains helpful ancillary rules that aren’t directly implicated by the core reissuance rules. The IRS should not exclude these helpful ancillary rules from the final regulations. … Continue Reading
On June 1, 2016, the New York Transportation Development Corporation issued over $2.25 billion in tax-exempt bonds as part of a public-private partnership to redevelop the Central Terminal building (known as Terminal B to passengers) at LaGuardia Airport in New York City. As The Bond Buyer reported, the deal broke all kinds of records – it … Continue Reading
For those who still had doubts, the IRS has now made it crystal clear: You can still issue tax-exempt bonds to advance refund most taxable bonds. In other words, the much-lamented “repeal of tax-exempt advance refunding bonds” in the Tax Cuts and Jobs Act from December 2017 isn’t ironclad. The repeal prevents the issuance of … Continue Reading
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 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
