ATLANTA — Issuers need to be aware that Build America Bonds can lead to not only savings on issuance, but also heightened scrutiny from the Internal Revenue Service, members of the Government Finance Officers Association’s governmental debt management committee said Saturday.

The group agreed that it needs to augment its advisory statement on issuing BABs to make sure issuers are aware that the IRS is taking a long, hard look at the debt instruments, starting with  questionnaires and ending with a higher likelihood of audit than on tax-exempt debt. The decision came during a committee meeting ahead of the start of the 104th Annual Conference here.

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