WASHINGTON — The Internal Revenue Service is auditing two separate issuers as part of a new initiative to determine the accuracy of filing form 8038-T.
The Service is auditing $36.72 million of variable rate revenue bonds the University Hospitals Trust of Oklahoma issued in 2005. The IRS notified the UHT that the Series 2005A bonds had been selected as part of a routine examination but it was part of a project involving arbitrage compliance in connection with the filing of form 8038-T.
The IRS' tax-exempt bond office has said one of its goals for fiscal 2013 is to address the accuracy of form 8038-T, which issuers must file when making an arbitrage payment. The form is due at the end of an issuer's computation period.
The TEB office said at least 100 correspondence exams will be sent out regarding the accuracy of form 8038-T. "As of the date of the correspondence the Service has no reason to believe that UHT has failed to comply with the federal tax requirements applicable to the 2005A bond," the notice said.
The UHT disclosed the audit in an event notice filed with the Municipal Securities Rulemaking Board's EMMA system on Feb. 14.
"UHT believes that is has complied with all federal tax requirements applicable to the 2005A bonds and is working with its counsel to respond to the IDR," the notice said.
The bonds were partially used in the construction of a new Children's Hospital Ambulatory Care and Medical Office Building space, a parking garage and the construction of an additional cancer and genetics research space, all located on the Oklahoma Health Center Campus, according to bond documents.
Bank of America Securities LLC was underwriter. Fagin, Brown, Bush, Tinney & Kiser was bond counsel. Separately, the IRS is auditing an undisclosed amount of consolidated revenue variable rate demand bonds, Series 2004 issued by the board of regents of the University of Houston System.
The issuer received a letter from the IRS on Feb. 12 stating the Series 2004 bonds were selected for examination as part of a project involving the filing of form 8038-T.