WASHINGTON - The Internal Revenue Service is auditing $50.9 million of revenue bonds issued in 2003 by the University and Community College System of Nevada, now called the Nevada System of Higher Education.
The issuer disclosed the IRS action, which appears to be a random audit, in a material event notice filed with the Municipal Securities Rulemaking Board's EMMA system last week.
The issuer received a letter from the IRS dated July 6 stating that the Series 2003B bonds had been selected for examination, according to the notice.
"At this time we have no reason to believe that your debt issuance fails to comply with any of the applicable tax requirements," the letter stated.
The IRS also included an information document request form with the letter, asking the college system to provide various documents in connection with the issuance of the bonds and the investment of bond proceeds, in addition to requesting a tour of the facilities.
The issuer said in its notice that it is cooperating with the examination.
The bonds were issued to finance the construction of parking facilities at the University of Nevada's Reno campus and student housing facilities at the university's Las Vegas campus, according to bond documents.
The parking project was estimated to cost approximately $28 million, with UNR agreeing to pay any amount exceeding that out of internal funds. The UNLV housing project would contain 478 beds across two buildings, and was expected to cost about $21 million.
Swendseid & Stern, a Nevada law firm that is part of Sherman & Howard LLC, was bond counsel on the deal, according to bond documents. Netherlands-based ABN AMRO Bank NV, was the underwriter and Wells Fargo Bank NA, was the paying agent, according to Thomson Municipal Market Monitor.
