WASHINGTON – The Internal Revenue Service is auditing $105.48 million of passenger facility charge revenue bonds issued by Clark County, Nev., in 2007 to finance capital improvements at McCarran International Airport.
Airport officials disclosed the audit in an event notice posted on the Municipal Securities Rulemaking Board's EMMA system.
The 2007 Series A-2 bonds were part of a larger $218.99 million issue, divided between bonds subject and not subject to the alternative minimum tax. The Series A-2 bonds were not subject to the AMT.
Airport officials said in the event notice that the 2007 Series A-2 bonds were refunded last year.
An IRS agent notified county officials of the audit in a May 5 letter, saying it was part of an effort to audit governmental financings of airport facilities.
"The purpose of our audit is to determine compliance with federal tax requirements," said the agent. "We have no reason to believe the bonds are noncompliant as we begin this audit."
The agent provided county officials with a nine-page Form 4564 with 38 requests for documents or information regarding the bonds.
Among other things, the agent wants the bond transcript and all related documents, all minutes of meetings of the issuer related to the bonds or to the operation of the airport, and a list of all users of the financed property and the amount of revenue each received after the property was placed in service.
The agent also wants all management agreements with respect to the financed facility, details of the security for the bonds, and rebate reports.
The form asks: "Has the issuer adopted effective procedures which contain the following key characteristics to ensure that violations are timely identified and corrected so that bonds remain in compliance with federal tax requirements from the time they are issued until they are no longer outstanding?"
The characteristics include due diligence, identification and training of those responsible for review, and record retention.
The bonds were issued to pay for capital improvements to the airport and to reimburse the airport for previous amounts expended on capital improvements, according to the official statement.
They were underwritten by UBS Investment Bank, Citi, and Siebert Brandford Shank & Co. Bond counsel was Swendseid & Stern, a member in Sherman & Howard. Financial advisers were Hobbs, Ong & Associates and Public Financial Management.
