WASHINGTON - Tribal governments and their advisers urged members of Congress yesterday to pass legislation that would no longer allow the IRS to interpret the tax law in a way that unfairly limits the tax-exempt debt Indian tribes can issue and puts them at a competitive disadvantage to state and local governments.

Indian tribes seeking to issue tax-exempt bonds have been handicapped by the stances the Internal Revenue Service has taken in enforcement audits, which inhibits their ability to issue bonds, secure bond insurance, and ultimately find investors, they told members of the Senate Finance Committee at a hearing on how to improve tax policy for tribal governments.

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