Tax audits

The Office of Tax-Exempt Bonds has been staffing up, IRS officials said at the National Association of Bond Lawyers conference in Chicago.

AI will be part of a new tax-enforcement effort that will target high-income earners, partnerships, and large corporations.

The agency has already begun hiring new staff and preparing for an $80 billion dollar agencywide influx of funding.

Two issuers, the San Diego County Regional Airport Authority and the Village of Franklin Park, Illinois, have disclosed in the past week that they’re under audit by the Internal Revenue Service.

Another correctional facility avoids a private business use tax penalty.

In Montana, two school districts and the state government reported that a new state law signed by the governor on May 6 will end the state tax deduction for certain school bonds after 2023 if those bonds are federally taxable.

The administrative shuffle also means that Edward Killen, who had been promoted to Acting Commissioner of TEGE, will return to the role of deputy.

Monday’s announcement came at the halfway mark of fiscal 2021 after only one other priority -- arbitrage violations -- had been announced since the Oct. 1 start of the federal fiscal year.

Other detention centers and prisons operating near the U.S.-Mexico border have undergone similar IRS audits the last couple of years in which issuers have agreed to convert their bonds from tax-exempt to taxable.

The public notice filed on EMMA is the first report by any issuer in calendar 2021 of any type of IRS audit communication.