The Northside Independent School District of San Antonio disclosed yesterday that the IRS has closed a random audit of $170 million of variable-rate bonds they sold in 2003 with no change to the tax-exempt status.
The district disclosed the Internal Revenue Service's action in a material event notice filed with the nationally recognized municipal securities information repositories.
The service opened an examination of the debt on Dec. 17, 2007, but told the district it was random and not because it suspected noncompliance. The district provided information related to these particular bonds to the service and, on March 23, 2009, it received a letter from the IRS announcing the conclusion of the audit with no change to the bonds, according to the notice.
The bonds were issued to finance the acquisition of land, the constructing and equipping school buildings, renovations, and to pay costs of issuance, according to bond documents.
RBC Dain Rauscher Inc., now RBC Capital Markets, was the underwriter of the bonds, and Fulbright & Jaworski LLP was bond counsel.
Meanwhile, the Payne County, Okla., Economic Development Authority clarified in a follow-up notice that the two information document requests it received from the IRS earlier this month were part of an ongoing examination.
The authority issued a material event notice with the NRMSIRs on May 4 announcing that it had received two information document requests from the IRS, which is seeking information regarding $161.3 million of variable-rate demand student housing revenue bonds it issued in 2002.
However, the authority did not state in the notice whether the information document requests were part of an initiative or even if the bonds were under audit. In a follow-up notice filed last week, the authority stated that it had received a letter on July 25, 2008, from the service announcing the bonds were under audit.
The bonds were issued to finance a number of student housing projects at Oklahoma State University.
Morgan Keegan & Co. was underwriter on the deal, while Floyd Law Firm PC and Phillips McFall McCaffrey McVay & Murrah PC were co-bond counsel.
Bradley S. Waterman, the Washington-based tax controversy attorney representing the county before the IRS, declined to comment yesterday on the audit.
