WASHINGTON — The Treasury Department wants to hear from the public about the form issuers must file to recover excess amounts of arbitrage they rebated to the federal government.
In a notice published Monday in the Federal Register, the Treasury said it plans to assess how much of a burden it is for issuers to fill out and submit Form 8038-R.
Written comments should be submitted to the department by Dec. 3, the Treasury said.
No changes are being made to the form, but rather the department is seeking public input as part of its ongoing effort to periodically evaluate its regulations and forms.
Specifically, Treasury wants to assess whether the form is achieving its designed purpose; if the department is accurately estimating how much time it takes to fill out, and how much it costs to do so; and whether the form can be improved to minimize the burden it creates.
Issuers file the form with the Internal Revenue Service to recover excess arbitrage rebate payments they may have made. Issuers of tax-exempt bonds are required to rebate most positive arbitrage earnings to the IRS for the bonds to remain tax-exempt.
The IRS updated its arbitrage rebate procedures in 2008, imposing a two-year limit on how long issuers could take to claim rebate overpayments.
However, the changed procedures do not allow the IRS to pay interest on refunded amounts. Issuers have complained in the past that they should receive interest due to the Treasury’s sometimes slow turnaround in sending overpayment refunds, but department officials maintain they lack the statutory authority to do so.
