Tax

The Government Finance Officers Association is the latest group to cry foul over the Internal Revenue Service and Treasury Department’s proposed political subdivision rules, and called on the IRS to withdraw the proposal.

Four port authorities and a wholesale electricity provider are warning that rules proposed by the Treasury Department and Internal Revenue Service earlier this year could hurt their standing as political subdivisions and their ability to issue bonds as well as complicate their governing structures.

The Internal Revenue Service has closed two audits with no change to the tax-exempt status of $117.73 million of utility revenue bonds issued by the Village Center Community Development District in 1998 and 2003, but retired in 2014.

An Illinois city is currently under audit for $12.8 million of general obligation corporate purpose bonds it issued seven years ago.

Washington State Treasurer and National Association of State Treasurers president Jim McIntire this week called on the federal government to play a more active role in securing infrastructure funding for local governments and called on lawmakers to protect the tax-exempt status of municipal bonds to fund such projects.

Facing new federal constraints on tax-exempt debt for projects with a private revenue stream, El Paso County, Texas, refunded tax-exempts with taxable bonds and still achieved interest rate savings.

Colorado state lawmakers have passed legislation designed to validate previous elections of special districts and protect them from legal challenges to their “qualified electors” who vote to create the districts and authorize issuances of tax-exempt bonds.

Rep. Randy Hultgren, R-Ill., warned House subcommittee leaders considering tax reform proposals on Thursday that a cap or elimination of tax exemption for municipal bonds could raise the cost of infrastructure projects in their own districts.

The Indianapolis Airport Authority said this week that it has agreed to settle a dispute with the Internal Revenue Service over rebate liability in connection with $347 million of tax-exempt bonds, even though it disagrees with the IRS' position on the bonds.

A California authority and a high school district said this week that they are prepared to file a protest and appeal of an expected Internal Revenue Service proposed adverse determination that $25.4 million of tax-exempt variable rate demand bonds are taxable.

Bipartisan groups of House and Senate lawmakers are urging the Treasury Department and Internal Revenue Service to ease barriers that prevent nonprofit lenders from using tax-exempt bonds to refinance student loans.

A broad ruling by the Colorado Court of Appeals in a case of a developer’s egregious fraud has sent lawyers to the state’s General Assembly for legislation to protect existing special districts that issue tax-exempt bonds.

Three Democratic Senators representing states without sales taxes recently wrote a letter to Senate leadership opposing federal legislation that would impose an Internet tax sales tax on its businesses.

A bipartisan bill introduced in the House would expand the ways in which Indian tribes can issue tax-exempt bonds and put them more on par with state and local governments under the federal tax law.

November’s election could create momentum for federal tax reform, said panelists at The Bond Buyer’s National Municipal Bond Summit.

The Internal Revenue Service is preliminarily challenging the tax-exempt status of bonds issued by the District of Columbia as part of a much lauded public-private partnership to build a new elementary school.

President Barack Obama, Vice President Joe Biden and their wives released their 2015 federal income tax reforms on Friday, with neither showing any municipal bond holdings or tax-exempt interest.

Two House Republicans presented a committee with their legislative proposals to reform or abolish the federal income tax system, sparking concerns from some members of the municipal bond community.

The National Association of Bond Lawyers is calling for the Internal Revenue Service and Treasury Department to revise and re-propose rules that would determine when entities are political subdivisions that can issue tax-exempt bonds.

The Conroe Industrial Development Corporation in Texas has paid a penalty and agreed to redeem bonds under the Internal Revenue Service’s voluntary closing agreement program (VCAP) to settle a tax violation relating to bonds it issued in 2008 and refunded in 2012.