WASHINGTON — Issuers in Colorado and Nevada separately disclosed this week that the Internal Revenue Service is conducting routine audits of bonds they issued in 2006.
The audits pertain to $600 million of sales tax revenue bonds issued by the Regional Transportation District in Colorado and $151.56 million of general obligation bonds sold by Las Vegas Valley Water District in Nevada. They were disclosed in event notices posted on the Municipal Securities Rulemaking Board's EMMA system.
Letters from the IRS to each of the issuers, which were included in the EMMA filings, state that the audits are part of initiatives of the agency. The RTD bonds are being audited as a part of a project involving transportation bonds, and the water district bonds are being audited as part of a project involving environment bonds.
"At this time, we have no reason to believe that your debt issuance fails to comply with any of the applicable tax requirements," the IRS letters said.
Transportation and environment bonds are two types of bonds that the IRS tax-exempt bond office is focusing on as part of its market-segment program. Under the program, TEB is testing its hypotheses about where there may be the greatest risk of noncompliance.
The RTD series 2006A bonds were issued to finance a portion of the district's comprehensive transit expansion plan called FasTracks. The plan includes additional miles of light rail, commuter rail and bus rapid transit in the Denver area. A syndicate led by UBS Investment Bank underwrote the bonds, and Sherman & Howard LLC was bond counsel, according to the official statement for the bonds.
The Las Vegas Valley Water District series 2006A bonds were issued to finance water projects part of the district's major construction program. Merrill Lynch & Co. was the initial purchaser of the bonds. Swendseid & Stern, a member of Sherman & Howard, was bond counsel, according the bonds' official statement. Some of the water district's bonds have matured.