WASHINGTON — The Internal Revenue Service has closed an audit of series 2005E and series 2007B hospital revenue bonds issued by the Highlands County, Fla. Health Facilities Authority with no change to the bonds’ tax-exempt status.
The authority disclosed the completion of the IRS examination in an event notice filed with the Municipal Securities Rulemaking Board’s EMMA system on Monday. The IRS notified the authority about the end of the audit in July. The bonds under examination were refunded in 2012.
Roughly $62.5 million of series 2005E bonds and $84 million of series 2007B bonds were initially issued as auction-rate securities, according to Brad Waterman, a tax-controversy lawyer representing the issuer. The authority issued the bonds for the Adventist Health System.
The bonds were converted to variable-rate debt obligations in December 2008, following the collapse of the auction-rate securities market, and were deemed to have been reissued during that month for federal tax purposes, Waterman said.
The converted series 2005E bonds were refunded with some of the proceeds from the sale of $232.13 million of Highlands County Health Facilities Authority hospital revenue refunding bonds, Series 2012I.
The series 2007B bonds were refunded with some of the proceeds from the sale of $276.97 million of Kansas Development Finance Authority hospital revenue refunding bonds, Series 2012A, the proceeds of other bonds issued by the authority, and other funds, Waterman said.