IRS Releases New Form to Aid Issuers with VCAP Requests

The Internal Revenue Service's tax exempt bond office released a new check list form that issuers must fill out if they want to participate in the voluntary closing agreement program.

The five-page Form 14429, released late Friday, is designed to assist municipal bond issuers in organizing their VCAP requests and in ensuring that their submissions are made in accordance to federal tax law requirements, TEB said in its release.

Under the VCAP program, issuers can voluntarily notify the IRS about tax violations they cannot correct themselves. Typically they will receive more lenient treatment than if the IRS had found the violations. The program allows them to "resolve a violation or other tax matter jeopardizing the tax-advantaged status of its bonds," the form stated.

The form will also help facilitate the process for accepting requests and assigning requests to a TEB specialist.

"I think the bond community will find it a lot easier to complete the checklist as opposed to cull through the entire Internal Revenue Manual," said Sandra Westin, tax law specialist with TEB.

Westin was the brainchild behind the new form and said she began working on it nearly two years ago, modeled after the check list that is used when taxpayers submit a private-letter ruling request for tax law guidance.

"It's an effort to be helpful and be more clear. It will save everyone time. It's organized and straight-forward," Westin said. "It's supposed to be an aid for the bond community and make the whole process easier. It doesn't require anything additional under the IRM and what's in the notice."

Sometimes if information is missing in a VCAP request, it can take several months to circle back to the issuer and complete the application. This new form is designed to help avoid that problem, Westin said.

Section 7.2.3 of the IRM currently provides detailed procedures for TEB's VCAP program.

While other parties, such as a conduit borrower or trustee, can participate in a VCAP request, only the issuer can use this new form to request to participate in the program.

"The purpose of it is to help issuers avoid inadvertently omitting the answers to any particular question that is raised in the IRM. Until now, when we prepared a VCAP we worked directly from the IRM," said Rick Ballard, partner with Ballard Spahr. "It's easy at some point in the process have something slip between the cracks."

"It's a checklist to make sure you don't leave anything out," he said. "There is nothing new in the form that isn't in the IRM."

Ballard said the release of the new form, along with TEB's VCAP for certain tax-exempt student loan bond issuers, will be discussed at this week's National Association of Bond Lawyers annual Tax and Securities Law Institute conference in San Francisco, Calif.

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