The Internal Revenue Service is auditing $69.83 million of sales tax revenue refunding bonds issued by the Regional Transportation District in Colorado in 2007.

The district disclosed the audit in an event notice filed with the Municipal Securities Rulemaking Board's EMMA system on Aug 14.

The IRS told the district its bonds were being examined as part of a project/initiative involving compliance of advance refunding bonds under Section 103 of the Internal Revenue Code.

"The primary purpose of this examination will be to ascertain the compliance of your debt issuance with the federal tax requirements applicable to tax exempt financings," the IRS said. "At this time, we have no reason to believe that your debt issuance fails to comply with any of the applicable tax requirements."

The bonds were issued to refund certain portions of the district's outstanding sales tax revenue bonds, according to bond documents. The district issued $68.81 million of sales tax revenue bonds in 2000, $153.23 million issued in 2002 and $116.46 million in 2004.

"The district is cooperating with the IRS in its examination of the bonds," it said in the notice.

Sherman & Howard LLC was bond counsel. Goldman, Sachs & Co., was the underwriter.

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