The Internal Revenue Service is expanding its voluntary compliance program to include tax-credit bonds, according to a notice released by the agency yesterday.
In addition to including tax-credit bonds, Notice 2008-31 updates the previous notice on VCAP regarding what department of the IRS' tax-exempt/governmental entities branch will handle VCAP claims. Previously, issuers coming forward with potential bond problems went to the outreach, planning, and review department. The notice now directs issuers to go to compliance and program management, which is managed by Steven Chamberlin in St. Louis.
The notice also clarifies that all information submitted to the VCAP must be done in an electronic format.
The VCAP program was established by the IRS tax-exempt bond office to allow issuers who discover potential problems with their bonds to come forward voluntarily to address those concerns with the IRS in exchange for more lenient penalties.
Issuers can enter into the program only if: the violations cannot be remediated under existing provisions or closing agreement programs contained within the regulations or other guidance, the bond issue is not currently under examination; the tax-exempt status of the bonds is not pending before a court, and the IRS determines the violation was not due to willful neglect.
In an interview last month, TEB director Cliff Gannett said the IRS had reached 23 voluntary agreements totaling $5.3 million in fiscal 2007. So far in fiscal 2008, which started Oct. 1, $3.9 million of agreements have been reached under VCAP.