WASHINGTON — The Internal Revenue Service has told the Nebraska Public Power District that $10 million of the $50.36 million of Build America Bonds it issued in June 2009 may not qualify for the 35% interest subsidy it receives from the Treasury Department because of a dispute over the issue price of the bonds.

The NPPD disclosed the information — the first public disclosure of an IRS challenge of a BAB subsidy — in an event notice posted with the Municipal Securities Rulemaking Board’s EMMA system. The district said the dispute arose from a routine examination of the bonds.

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