The Internal Revenue Service has ruled that an agency consisting of several governments can finance the acquisition of gas wells with tax-exempt bonds even though it does not meet all the regulatory requirements.

In a private-letter ruling that was publicly released last month, the IRS determined that the agency could refinance the acquisition of gas wells with tax-exempt bonds, even though the governments lacked the specific statutory authority to form the agency, as required by an IRS revenue ruling on the matter.

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