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 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
To promote the provision of disaster relief and the development (or redevelopment) of economically distressed areas, Congress will at times enact targeted bond programs that authorize the issuance of specialized tax-exempt bonds. Tax-exempt targeted bond programs frequently contain both a cap on the amount of tax-exempt bonds that can be issued under the program and … 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 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
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
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
Every year, the National Association of Bond Lawyers (“NABL”) hosts the Tax and Securities Law Institute (“TSLI”), which is an advanced conference with various workshops related to pressing issues confronting tax and securities lawyers in the public finance arena. Essentially, the annual TSLI is like Chrismukkah for tax and securities lawyers. This year’s meeting … Continue Reading
Noted public finance tax lawyer Clubber Lang remains correct in his prediction about Direct-Pay bonds. For those issuers that haven’t yet redeemed their direct-pay bonds with tax-exempt bonds, sequestration cuts to interest subsidies for direct pay bonds will continue for federal fiscal year 2016 (October 1, 2015 through September 30, 2016), according to a report that the IRS … Continue Reading
As memories begin to fade of the excitement we all had in trying to decipher the alphabet soup of tax credit bonds enacted during the depth of the recession, the IRS recently reminded us that our interpretations of those often vague rules may soon be put to the test of an audit. On July 20, … Continue Reading
As a follow-up to our prior post, More Thoughts On The BAB Reissuance Memo, we turn to a related question and its history: Why is the treatment of BAB reissuances only being addressed now? The short answer is that refundings of BABs are new. But please join us as we explore the important backstory.… Continue Reading
After coverage here, here, here, and here, we return yet again with even more thoughts on the BAB reissuance memo. We explore to whom the BAB reissuance memo matters. Riddle me this, Batman: To whom does this memo matter?… Continue Reading
As Naomi Jagoda reported in The Bond Buyer yesterday ($), the National Association of Bond Lawyers has asked the IRS to revoke Advice Memorandum 2014-009, in which the IRS concludes that if you defease BABs with tax-exempt bonds, the BABs are treated as retired and reissued and are therefore no longer eligible for subsidy payments because the … Continue Reading
Naomi Jagoda has an article in The Bond Buyer ($) today with more commentary on Advice Memorandum 2014-009, where the IRS says that BABs don’t get the benefit of the rule that the defeasance of a “tax-exempt bond” doesn’t cause the bond to be reissued. Note that others in the community are raising the same point that was raised in yesterday’s … Continue Reading
Earlier this year, we wrote about issuers that are weary of losing interest subsidies to sequestration and that have paid off their direct pay bonds with tax-exempt bonds. We noted two main questions where the issuer doesn’t pay off the direct pay bonds immediately, but instead puts the refunding bond proceeds into a defeasance escrow … Continue Reading
The Beastie Boys are considered rap pioneers in part for their extensive use of “sampling,” or cutting and splicing the music of other groups into works of their own. In particular, their 1989 album, Paul’s Boutique, was an early leading example of the possibilities of the technique. (There are plenty of interesting copyright questions raised by … Continue Reading
Noted 103 tax lawyer Clubber Lang was correct in his prediction about Direct-Pay bonds. For those issuers that haven’t yet redeemed their direct-pay bonds with tax-exempt bonds, sequestration cuts to direct payments will continue for federal fiscal year 2015, at a slightly higher rate – 7.3%, up from 7.2%. The higher cuts took effect at … Continue Reading
