Tax

A lengthy tax relief and job creation bill recently introduced in the House would exempt private-activity bonds issued from 2015 through 2018 from the alternative minimum tax, repeal sequestration, and create an infrastructure bank. But it also would cap the value of the municipal bond tax exemption at 28%.

Congress needs to raise the debt limit before Nov. 5, the date around when the Treasury Department is expected to exhaust the “extraordinary measures” it has been using to preserve the U.S. borrowing capacity, Treasury Secretary Jack Lew told lawmakers.

Half of the Internal Revenue Service tax-exempt bond office’s resources in fiscal 2016 will be allocated to examinations, and priority will be given to referrals, including those from whistleblowers, according to a work plan summary.

Republican presidential candidate Donald Trump released his tax reform proposal on Monday and grabbed the attention of municipal market participants because it would lower tax rates and reduce or eliminate tax deductions and loopholes for the rich.

The Internal Revenue Service has determined that industrial development bonds issued by the city of Minneapolis in 2006 for a printing-facility project are taxable.

The IAH Public Facility Corp. has reached a proposed settlement with the Internal Revenue Service to resolve a tax-law dispute relating to about $49 million of bonds it issued in 2004 and 2006 to finance a jail in Polk County, Texas.

Market groups are pushing the Internal Revenue Service to change its proposed issue price rules to include a safe harbor for competitive deals, warning the failure to do so will disrupt market practices and hurt issuers.

The Internal Revenue Service chief counsel’s office has issued a technical advice memorandum that was favorable to an issuer of advance refunding bonds.

Former Internal Revenue Service director Mark Scott is urging the IRS to revoke a private-letter ruling that was favorable for a total return swap, arguing that TRS’ are “[arbitrage scheme[s]” that have “resulted in hundreds of millions of dollars of illegal tax benefits being stolen.”

While the issue price rules proposed by the Treasury Department and Internal Revenue Service in June are a “significant improvement” over those proposed in 2013, the alternative method for determining issue price under the recent proposal is currently “not workable,” the Securities Industry and Financial Markets Association wrote.

Wayne County, Mich.’s disclosure that the IRS is auditing $200 million of bonds is a credit negative, because the cash-strapped county could have a hard time covering the costs of the federal interest subsidy if is lost, Moody’s Investors Service said Friday.

The National Conference of State Legislatures is urging Congress to not consider extending or making permanent the moratorium on state and local governments taxing Internet access unless it does so at the same time as or after it considers legislation that would allow states to require out-of-state online retailers to collect sales taxes.

The Internal Revenue Service is conducting a targeted audit of $200 million of recovery zone economic development bonds issued in 2010 by the Wayne County Building Authority in Michigan to finance a jail facility that was never completed.

The Internal Revenue Service’s tax-exempt bond office expects to close about 120 voluntary closing agreements in fiscal 2015 – a figure that would be more than double the 51 closed the previous year, an IRS official said.

Market participants expressed some criticisms of the alternative method for determining issue price under rules proposed in June and said it was unlikely to be used very often.

The Treasury Department and the Internal Revenue Service hope to release guidance projects on political subdivisions and allocation and accounting rules this fall, Treasury associate tax legislative counsel John Cross told bond lawyers meeting here.

The Internal Revenue Service is auditing $91 million of Build America Bonds issued by the Minnesota Public Facilities Authority in fall 2010.

Secondary market disclosure, issue price, the tax exemption for municipal bonds and private placements with banks are some of the topics the National Association of Bond Lawyers will focus on in the coming year, according to the group’s incoming president, Kenneth Artin.

The Internal Revenue Service is working on more specialized template voluntary closing agreements, an official with the IRS' tax-exempt bond office said.

Nearly half of tax-exempt interest reported on 2013 individual income tax returns was on returns with adjusted gross income of less than $200,000, and most of the returns reporting tax-exempt interest had a primary taxpayer over the age of 65, calculations based on recently released Internal Revenue Service statistics show.