The Vallejo City Unified School District in California this week disclosed that the Internal Revenue Service preliminarily determined that its $61.06 million of Series A 2002 general obligation refunding bonds are arbitrage bonds and therefore taxable.

The district sent a material event notice to nationally recognized repositories on Jan. 8 saying it had received the adverse preliminary determination from the IRS on Oct. 12, 2007. The school district is the 11th to disclose it received such a notice from the IRS for similar forward-delivery advance refunding bonds.

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