As reported several times in this blog (here, here, and here), Rev. Proc. 2016-44 significantly expands the opportunities for management/service contracts that don’t result in private business use. One such post was Joel Swearingen’s very thoughtful piece on the future of the facts and circumstances test as applied to these contracts (here). Of course, Rev. … Continue Reading
Search Results for: facts and circumstances
Ignore the rules (if they don’t apply)
We are rather fond (because you are rather fond) of discussing Rev. Proc. 97-13 and related authorities that address private business use from management contracts. Back in 2014, when the IRS amplified Rev. Proc. 97-13 in Notice 2014-67 (collectively, “97-13”), we even made a holiday present of it. Now more than ever, 97-13 is an … Continue Reading
A Summary of the Final Regulations on Non-Issue Price Arbitrage Restrictions
On July 18, 2016, the Treasury Department published final regulations on non-issue price arbitrage restrictions (the “Final Regulations”) in the Federal Register. The Final Regulations finalize regulations proposed in 2007 and 2013 (collectively, the “Proposed Regulations”). Click here for a copy of the Final Regulations, and read below for a high-level summary of them. We … Continue Reading
Recent IRS Private Letter Ruling Provides Helpful Guidance on Management Contracts
On May 27, 2016, the National Office of the Internal Revenue Service (“IRS”) released Private Letter Ruling (“PLR”) 201622003. PLR 201622003 continues the trend of favorable PLRs issued by the IRS on the question of whether, under a facts-and-circumstances analysis, a management contract that fails to satisfy a Rev. Proc. 97-13 safe harbor from private … Continue Reading
Is It Possible for a Municipal Corporation Not to be a Political Subdivision?
With the recent issuance of the proposed regulations that would redefine the term “political subdivision” for purposes of determining which entities can issue tax-exempt bonds under Section 103 of the Internal Revenue Code, as amended (the “Code”), the answer to this seemingly rhetorical question is “yes,” at least according to the Treasury Department. This is … Continue Reading
Line Drawing
(This Has Nothing to Do with Geometry, Art Class, or Parenting of Young Children) Lawyers profess a love of clarity while making their living from a lack of clarity. Lawyers nobly use phrases such as “black letter law” and “bright line test”. Lawyers ask regulators and courts for clear and concise rules that are easily … Continue Reading
Summary of Proposed Regulations on Political Subdivisions
On February 23, the IRS published proposed regulations regarding the definition of “political subdivision” (81 Fed. Reg. 8870). The proposed regulations define a political subdivision as an entity that meets three requirements: (1) sovereign powers, (2) governmental purpose, and (3) governmental control.… Continue Reading
When Two Financial Instruments Become One
Subtitle: Should You Let Your Swap Marry Your Bond Issue Without A Pre-Nup? Subsubtitle: If You Are Going To Let Your Swap Marry Your Bond Issue Without A Pre-Nup, Please Tell Bond Counsel Early in the Process As discussed in prior posts on this Blog (here and here), since the beginning of the last … Continue Reading
IRS Private Letter Ruling “Shinin’ Down Like Water”
In 1971, Creedence Clearwater Revival (CCR) released the song, “Have You Ever Seen the Rain”. One line in the song says “When it’s over, so they say, it’ll rain a sunny day, I know, shinin’ down like water”. We have to concede that when it comes to song lyrics, poetic license occasionally must trump the … Continue Reading
Mostly Good News for Qualified 501(c)(3) Bonds Under ACA Regulations
The Patient Protection and Affordable Care Act (“ACA”) imposes several new requirements on charitable hospitals. Charitable hospitals that benefit from tax-exempt qualified 501(c)(3) bonds were concerned that violations of these ACA requirements would either result in a loss of the charitable hospital’s 501(c)(3) status, or result in excessive private business use, either of which would … Continue Reading
