Specialized VCAPs

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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

Hot Topics from the Tax and Securities Law Institute’s Annual Meeting

                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

A New Hampshire Tale (Part 1)

The IRS Appeals office has dropped the examination of nine student loan bond issues of the New Hampshire Health and Education Facilities Authority. The examination had begun after the Authority entered but then withdrew from the IRS specialized “voluntary closing agreement program” for student loan bonds. The IRS created this targeted VCAP in 2012 as a standalone … Continue Reading

It’s the Thought that Counts – IRS Provides Relief to Narrow Class of Troubled 501(c)(3) Bonds

The IRS has issued Announcement 2015-02, which allows issuers of qualified 501(c)(3) bonds to pay a small penalty to protect the tax status of the bonds where the conduit borrower lost its 501(c)(3) status because it failed to file returns with the IRS for three straight years. It’s welcome relief from a particularly nasty rule, but … Continue Reading