The Internal Revenue Service is seeking information from tax-exempt bond issuers about how much of a burden existing arbitrage regulations place on them.

The agency issued the request for comments Thursday in an effort to determine how much time issuers spend collecting information and monitoring their investments to ensure they do not earn "arbitrage."

The term arbitrage is defined as earnings on bond proceeds that materially exceed the yield on the bonds. If arbitrage is detected, an issuer generally is required to rebate that amount to the IRS for the bonds to remain tax-exempt.

The agency estimates that it takes a tax-exempt issuer roughly 14.5 hours to compile and file forms to rebate arbitrage, but it is asking them to weigh in on whether that burden estimate is accurate.

The IRS also wants to know: whether issuers think it is collecting the right arbitrage-related information from them; how it could improve the collection and quality of its information; how it could minimize the burden of information collection through technology; and how much it costs the issuer to establish and maintain services for collecting arbitrage information.

The deadline for submitting written comments is May 18.

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