The Internal Revenue Service is seeking comments from municipal issuers on how much time and effort it takes to both apply for federal payments under the Build America Bonds program and comply with looser regulations for small-issue industrial development bonds.

The IRS asked for the comments in three separate notices issued last week.

Two of the notices deal with the BAB program, which allows muni issuers to sell taxable debt in exchange for a subsidy from the federal government or the government providing investors with tax credits.

One notice seeks public comments on how the direct-payment aspect of the program is being implemented. Some issuers have expressed concerns that they must apply for BAB payments by submitting a paper form and receiving a check in the mail.

The Treasury Department has said that it is looking into making the entire process electronic. This notice also applies to federal payments to issuers of recovery zone economic development bonds, $10 billion of which were authorized by the stimulus law and are structured similarly to BABs.

In another notice, the IRS is seeking comments on the new Form 8038-CP, which BAB issuers must submit to the agency to request subsidy payments. Issuers that want to comment on either notice must do so by Sept. 11.

In a third notice, the IRS is seeking public comment on the burdens of complying with final regulations that outline how governments must issue industrial development bonds as qualified small-issue bonds under the $10 million limit. Comments must be submitted to the IRS on those regulations by Sept. 14.

In each of the three notices, the IRS wants to know if the information it is requesting is relevant, how accurately it is estimating the burden of compliance, and how it can improve the information collection process or minimize the overall burden on issuers.

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