The Internal Revenue Service is auditing two separate series of hospital revenue bonds totaling $142.2 million that were issued by the Highlands County, Fla., Health Facilities Authority in 2005 and 2007 and then redeemed.
The authority disclosed the audit of the Series 2005E and 2007B bonds in an event noticed it filed with the Municipal Securities Rulemaking Board on Wednesday.
The authority said it received a letter from the IRS dated March 1 notifying it that its bonds had been selected for an examination.
“Adventist Health System Sunbelt Healthcare Corporation and its affiliates believe that all requirements of
the Internal Revenue Code of 1986, as amended, relating to the tax-exemption of interest on the bonds have been satisfied,” the notice said.
The Highlands authority was created in response to the need for assistance in the development and maintenance of the public health in Highlands County, Fla., according to remarketing circulars for the bonds dated September 2009 that supplemented reoffering circulars from December 2008.
Banks provided substitute letters of credit for the two sets of bonds — $80.4 million of Series 2007B and $61.88 million of Series 2005E.
The “obligated group” of borrowers included a number of nonprofit hospitals and health care systems or facilities in several states, according to the remarketing circulars.
The notice on EMMA indicated the IRS audit would affect certain bonds issued by Colorado Health Facilities Authority, the Illinois Development Finance Authority, and the Kansas State Development Finance Authority, as well as the Highlands County authority.
