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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

When Gratuitous Honesty May be the Best Policy?

A few years ago, I wrote two blog posts (#1 and #2) regarding the likely penalties that a hospital qualifying for Section 501(c)(3) status (a “501(c)(3) hospital”) would incur if it failed to comply with the Patient Protection and Affordable Care Act (“ACA”) provisions set forth in Section 501(r) of the Internal Revenue Code of … Continue Reading

NABL Proposes “Enhanced Infrastructure Bonds” (or Build America Bonds 2.0)

The National Association of Bond Lawyers submitted eight legislative proposals to Treasury on August 22 with the stated purpose of improving the efficiency of tax-advantaged financing of much-needed public infrastructure projects (here is a link to the proposals).   The proposals would broaden the availability and simplify the existing forms of tax-exempt bonds as well as … Continue Reading

Moving On Down – In the Right Direction

In contrast to the theme song, “Movin’ on Up”, from the 1970s sitcom The Jeffersons, sometimes “moving on down” is better in certain circumstances. For example, it is preferable when discussing the sequestration rate for direct pay bonds.  Since sequestration began during the fiscal year ending September 30, 2013, the sequestration rate (i.e., the portion … Continue Reading

PLR 201726007 – Insights into the Facts & Circumstances Test for Private Business Use after Rev. Proc. 2017-13

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

The Regulatory Freeze: Where do we stand now?

The IRS tax exempt bond group (“TEB”) continues to work on completing its 2016-‘17 Guidance Plan, as Bob Eidnier wrote last week. However, it might be some time before we see that guidance because of executive branch actions intended to reduce regulations and regulatory costs.  The restrictions on new guidance are very broad, and appear … Continue Reading

Potential Changes for Churches and Charities Regarding Political Campaigning

A few weeks ago, President Trump announced that he would advocate for the repeal of the prohibition against certain religious organizations (i.e., those exempt from paying federal income taxes under Section 501(c)(3)) from engaging in political campaigning.  His statement was made at the National Prayer Breakfast to a group of religious leaders.  However, since the … Continue Reading

What Makes a Bond “Green”?

Most people agree that a “bond” is a financial instrument pursuant to which a creditor (holder of the bond) lends money to a borrower (the issuer of the bond) over a specified period of time in exchange for a periodic interest payment. However, although I occasionally see headlines about green bonds being issued, it was … Continue Reading

2017 – What lies ahead?

The year 2017 promises, and threatens, to be a potentially momentous one for public finance in the United States.  The Trump Administration and the 115th Congress may put in place tax reforms and infrastructure programs that will have transformative consequences for the financing of public projects in all sectors and at all levels.  These are … Continue Reading

Final Issue Price Regulations Issued

The Treasury Department issued final “issue price” regulations on December 9, 2016 (T.D. 9801) (the “Issue Price Regulations”).  Below is a summary of the general and special rules for determining issue price under the Issue Price Regulations: General Rule. The general rule, retained from the existing regulations, provides that issue price is determined by actual … Continue Reading

What Happens When the IRS and Issuer Agree to Disagree?

My last blog post was about how, as a result of a change in the Internal Revenue Code (the “Code”), the IRS will be altering the manner in which it audits many partnerships (and limited liability companies that are taxed as partnerships under the Code). In a nutshell, for tax years beginning on or after January … Continue Reading

An inconvenience of qualified equity

Like me, at some point in your childhood, you were probably told not to “look the gift horse in the mouth.” After reading this blog post, the same could be said to me.  We have written in great detail (see here,  here, and here) about the increased flexibility afforded issuers by the recently promulgated Final … Continue Reading

What’s in your Partnership Agreement? Why Non-Taxpaying Entities Should Care About Allocations of Taxable Income.

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

Where do the candidates stand on tax-exempt bonds?

What would a Clinton or Trump presidency mean for tax-exempt bonds? Both candidates have declared a desire to change our tax system, but will this mean any changes to the tax-exempt bond rules? Neither candidate has expressed a desire to change how the tax-exempt bond rules work, but their other policy goals may have an … Continue Reading

Update to Revenue Procedure 2016-44

A little over a week after the IRS released Revenue Procedure 2016-44 (the “Revenue Procedure”), it has been updated!  The IRS recently (and covertly) updated Section 7 (“Date of Applicability”) of the Revenue Procedure. Following the update, the prior safe harbors established in Revenue Procedure 97-13, as modified by Notice 2014-67, can be applied to any management contract entered … Continue Reading

Treasury Department Releases 2016-17 Priority Guidance Plan for Tax-Exempt Bonds – And It’s Already About One-Third Complete!

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

Bondholders of the Lost Ark

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
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