IRS

Jail bonds are being targeted for audits by the IRS this year with respect to whether federal government use of locally built facilities or management contracts with localities causes excessive private business use.

The challenge this year will be biggest in the three states that were found by the Council of Development Finance Agencies to be closest to using their 2018 limits — California, New York and Massachusetts.

The new alternative reference rates cited by Treasury and the IRS include the Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York and the Federal Funds Rate.

The Nov. 22 notice opened a 30 day window for the issuer to make a case that $877.9 million of bonds not be stripped of their tax-advantaged status.

The state should allocate $4 billion, the majority of its 2020 private activity bond allocation, to affordable housing, said the California Housing Consortium.

In formal comments filed with the federal government and separately to GASB, municipal finance groups have given the regulators generally high marks.

In 2012 John Cross became the first person to head the independent Office of Municipal Securities at the U.S. Securities and Exchange Commission.

The council suggested the VCAP program would remain in place for issuers who need a legally binding agreement, but would become the third tier of a system that would offer two simpler options.

Longtime IRS employee Allyson Belsome will serve as senior manager for the office of Tax Exempt Bonds.

Cross, who served as associate tax legislative counsel at the Office of Tax Policy until Friday, said that he resigned in order to be closer to family.