WASHINGTON – The Internal Revenue Service appears to have reversed itself in recently closing an audit with no change to the tax-exempt status of some general obligation bonds issued by a Pennsylvania school district issued in 2005 and advance refunded in 2013.

The IRS told Woodland Hills School District on Sept. 19 it had "decided to close the examination with no change to the position that interest paid to beneficial owners of the bonds is excludable form gross income," according to an event notice posted on the Municipal Securities Rulemaking Board's EMMA website.

The one-page event notice was posted to EMMA on Sept. 27.

The closure of the audit comes less than two months after the suburban Pittsburgh school district disclosed it expected to receive a proposed adverse determination letter from the IRS on the $31.65 million of GO refunding bonds it issued in 2013 and $30.85 million of Series D GO bonds issued in 2005.

The school district said in an event notice filed in July on EMMA that the IRS was suggesting there were tax law violations arising from the use of bond proceeds. Woodland Hills, located in Braddock in Allegheny County, first received a Notice of Proposed Issue (NOPI) in November, a form the IRS sends issuers when it has found potential tax violations and the issuer does not agree with the findings.

The NOPI sent to Woodland Hills covered what was still outstanding form the two bond issues -- $24.59 million of the 2005 bonds and $25.51 million of the 2013 bonds.

The $30.85 million of 2005 bonds was issued to finance the construction of a new East Junior High School and improve the district's athletic facilities, while proceeds from the 2013 bonds were used to advance refund the outstanding 2005 bonds as well as pay issuance and sale costs and expenses.

Attorneys from Clark Hill in Pittsburgh, the firm representing the school district in the audit, could not be reached for comment Monday. Woodland Hills superintendent Alan Johnson also did not return a request for comment. -

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