WASHINGTON — Build America Bond issuers that inadvertently violate tax law requirements and voluntarily seek to correct them would have their federal subsidy payments reduced, rather than eliminated, if the Internal Revenue Service adopts recommendations an advisory committee presented to it yesterday.

“We wanted the IRS to provide issuers with assurance that, if they issue Build America Bonds now and there is some inadvertent violation or foot fault, they’ll be able to resolve it on a reasonable and proportionate basis,” said Michael Bailey, a partner at Foley & Lardner LLP in Chicago who yesterday became chairman of the Advisory Committee on Tax-Exempt and Government Entities. The committee is known as ACT.

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