The Crystal City, Tex., Public Facilities Corp. has received an adverse tax determination notice from the Internal Revenue Service for $14 million of bonds issued in 2003 for a prison.

The issuer disclosed the IRS notice in a Municipal Securities Rulemaking Board EMMA filing on Friday. Farley Katz, an attorney at Strasburger & Price LLP, said in a letter that the issuer is exploring its options to either settle with the IRS or appeal the notice.

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