WASHINGTON — The Internal Revenue Service is auditing $23.83 million of variable rate demand bonds issued by the Colorado Health Facilities Authority in 2007.

The issuer disclosed the examination in a Dec. 4 event notice on the Municipal Securities Rulemaking Board's EMMA system.

The IRS told the issuer that it had no reason to believe that the bonds fail to comply with applicable federal tax requirements. The bonds are being audited as part of an initiative involving qualified 501(c)(3) bonds, according to the event notice.

As part of the market segment approach to examinations that the IRS began in fiscal year 2013, the agency is examining some 501(c)(3) bonds each year. Other market segments that the IRS' tax-exempt bond office are examining every year include bonds for which 8038-T forms are filed, tax and revenue anticipation notes, advance refunding bonds and solid waste bonds.

The bonds were issued for The Evangelical Lutheran Good Samaritan Society. Proceeds of the sale were used to refinance part of the society's revolving term loan with U.S. Bank, National Association and to finance or refinance the costs of improvements for nursing, health care and senior housing facilities, according to the official statement for the bonds.

Kutak Rock LLP. served as bond counsel. The bonds were underwritten by Citi and Piper Jaffray & Co.

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