Tax audits

“This is a preliminary determination, not a proposed adverse determination or a final determination,” the county said.

Sinking fund overfunding is the primary driver of these audits, with the IRS making sure the overfunding does not result in an arbitrage situation.

The audit involved four CUSIPs for $53.995 million in bonds issued in 2009.

The proceeds of the bonds were used for the construction of a 232,100 square foot residential facility with 108 living units located on the main campus of an existing facility in Dallas known as The Overlook.

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 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 Idaho audit involved $1.485 million general obligation bonds issued with a taxable direct-pay federal subsidy under the Qualified School Construction Bonds program.

Public safety and jail bonds, sinking fund overfunding and variable rate bonds are the top IRS compliance and enforcement priorities for the municipal bond market in fiscal 2020.

Six of the eight audits — including the Building Authority audit disclosed Monday — involve IRS Form 8038-CP.

This latest IRS action is one of a series of bond audits involving various government agencies in Puerto Rico.