We summarized last week the tax-exempt and tax-advantaged bond provisions of the Tax Cuts and Jobs Act (the “Act”), as introduced and referred to the House Ways and Means Committee. As a reminder, these provisions, which came as a shock to state and local governments, 501(c)(3) organizations, and others involved with public finance, would eliminate … Continue Reading
The title of this post is taken from an observation that a client once made when the strictures of the notice, hearing, and approval requirements set forth in Internal Revenue Code Section 147(f), which with limited exceptions apply to all issues of tax-exempt private activity bonds, worked to prevent a hoped-for use of proceeds of … Continue Reading
Last week Mike Cullers summarized Treasury’s latest addition to the final private activity bond regulations – the “Allocation and Accounting Regulations” — which were published earlier that week (LINK). This week we begin to focus on the details of those Regulations, beginning with the much appreciated “anticipatory remedial action” rule (the “ARA Rule”). [1] Prior … Continue Reading
While sitting through several sessions at the Bond Attorneys Workshop last week, I heard references to “measurement period” in different contexts. Although trying to stay focused on the always scintillating discussion, my mind wandered to the good and the bad of that concept. This post explores certain consequences of measurement period, including some surprising results.… Continue Reading
Under Section 148 of the Internal Revenue Code of 1986, as amended (“Code” – it’s been almost a year since we started this blog, and our devotion to defined terms remains unswerving), the gross proceeds of a tax-exempt bond issue cannot be invested at a yield that is materially higher than the yield of bond … Continue Reading
During his NBA playing career, former Philadelphia 76ers point guard Allen Iverson was known as The Answer. He famously minimized the importance of practice compared to official games, making it clear that he was compensated for playing in games, not for practicing. For income tax purposes, the City of Cleveland agrees with Mr. Iverson, taxing nonresident … Continue Reading
On October 30, 1975, The Daily News published one of the most famous headlines in American history – Ford to City: Drop Dead – to paraphrase President Ford’s refusal to extend federal financial assistance to New York City to prevent the City from declaring bankruptcy. Nearly 40 years later, a different branch of the federal … Continue Reading
The new tax-advantaged bond programs in the 2009 Stimulus Act (P.L. 111-5) appeared out of nowhere (or, in the case of direct pay bonds, almost out of nowhere), and left many in the tax-exempt bond community swimming in new concepts for several months. Once everyone finally worked through the new questions (just what was a “permitted sinking fund … Continue Reading
Sometimes, the most difficult part of drafting a blog post is conjuring up a title. This post deals with a case involving state income tax credits that was argued before the United States Supreme Court on November 12, 2014 and that will be decided by the end of the Court’s term in June 2015. If … Continue Reading
Last week we reported on recently released PLR 201502008 (Jan. 9, 2015), which involved a total return swap (TRS) relating to an issue of tax-exempt bonds (Bonds) where the holder of the Bonds was also the TRS counterparty. The TRS originally had a term of about two years and was being extended an additional five … Continue Reading
