WASHINGTON — The Internal Revenue Service has told Avondale, Ariz. that it believes $29.8 million of Build America Bonds it issued in 2009 do not qualify for subsidy payments because of tax law violations.

Avondale, which disclosed the IRS’ Nov. 12 proposed adverse determination letter in an event notice posted on the Municipal Securities Rulemaking Board’s EMMA system this week, said the subsidy payments for the BABs are estimated to be between $675,000 and $54,000 per year for 25 years. It said the loss of the subsidy payments, if retroactive, could total about $10.83 million from issuance through maturity.

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