Audit

Federal subsidy payments made to issuers of Build America Bonds are continuing even as Congress remains deadlocked over funding for government agencies.

The proposed settlement involves the Jan. 3 issuance of $7.3 million in transportation development refunding revenue bonds that are being used in the hope of resolving the tax audit of $9.55 million in tax-exempt bonds issued in 2009 for construction of a parking garage.

It’s unclear if monthly federal subsidy payments on Build America Bonds will be made.

Three areas are new additions to the work plan of the Tax Exempt and Government Entities Business Operating Division, IRS officials said.

The pilot program began in May, but was not officially announced by the IRS until last week.

The Internal Revenue Service has taken no action regarding tax-exempt refunding bonds that were issued for Gettysburg College in 2010, after closing an audit that appears to have been randomly initiated.

The bonds were issued by the Chester County Industrial Development Agency for West Chester University in Pennsylvania.

The 1.2-percentage point reduction will amount to $12,000 in saving on a $1 million tax settlement.

The audit could be part of an ongoing initiative by the IRS to examine refunding bonds, said a lawyer.

New York City’s Department of Finance continues to pay businesses that owe millions of dollars in past due taxes, according to an audit by Comptroller Scott Stringer.