Tax

The Internal Revenue Service's interim guidance on how certain accountable care organizations can be structured to avoid resulting in private business use is limited in its scope, the National Association of Bond Lawyers and the American Hospital Association said.

Bonds issued by the Village Center Community Development District in Florida, the subject of a years-long audit and a controversial technical advice memorandum, are taxable private-activity bonds, the IRS said in a new notice of proposed issue.

An online sales tax proposal from House Judiciary Committee Chairman Bob Goodlatte is drawing criticism from a top Senate Democrat and officials with state and local government groups.

Treasury Secretary Jack Lew said Wednesday that congressional Republicans and the Obama administration are too far apart on individual tax reform but could reach an agreement on business tax reform.

Senate Finance Committee Chairman Orrin Hatch said Tuesday that tax reform his top priority and that he is aiming for bipartisan tax-reform legislation to be introduced and voted on in the committee later this year. The state treasurers are urging him to preserve the tax exemption for muni bonds.

Municipal market participants applauded President Obama’s proposal on Friday to create a new type of tax-exempt municipal bond that could be used to help finance public-private infrastructure projects, but one questioned whether it will pass muster with Congress.

The Senate Finance Committee took a step toward comprehensive tax reform on Thursday by launching five bipartisan working groups charged with issuing a report with recommendations by the end of May.

Rebecca Harrigal, director of the Internal Revenue Service's tax-exempt bonds office, will provide updates on TEB's work in fiscal 2015 during an audio webcast next month, the IRS said Wednesday.

Sen. Dean Heller, R-Nev., has introduced a bill that would make the deduction for state and local sales taxes permanent, while Rep. Bob Goodlatte, R-Va., has introduced a bill that would make the moratorium on taxing Internet access permanent.

The Internal Revenue Service has announced a simplified process for issuers that have loaned proceeds of qualified 501(c)(3) bonds to borrowers that automatically lost their tax-exempt status for failing to file annual returns or notices for three consecutive years, but have subsequently received reinstatement of their tax-exempt status from the IRS.

New House rules on dynamic scoring could make tax reform easier to do, said municipal and tax experts who differed on whether such scoring would benefit or hurt municipal bonds.

Congress needs to preserve the tax exemption of municipal bonds if it's serious about supporting infrastructure, National Governors Association vice president and Utah Gov. Gary Herbert said.

The Internal Revenue Service has closed a targeted audit of Philadelphia's series 2010A water and wastewater revenue refunding bonds without making any changes to the bonds' tax-exempt status.

The Internal Revenue Service has established a standardized voluntary closing agreement program for issuers whose 501(c)(3) bonds benefited organizations that had their tax-exempt statuses prospectively reinstated after being revoked due to the failure to file returns for three consecutive years.

Final federal regulations make clear that most failures to meet certain requirements created by the new health care law won't hurt the tax-exempt status of nonprofit hospitals' bonds.

States on the whole will see a slight increase in their new capacity to issue private-activity bonds in 2015.

Tax reform, particularly corporate tax reform, is likely to be on the agenda in 2015, congressional observers said.

The Treasury Department and Internal Revenue Service next year will be working on further guidance on issue price, regulations finalizing other proposed arbitrage rules, and additional rulemaking projects.

State and local governments are the underdogs in influence peddling in Congress mostly because they spend little to nothing on lobbyists, in contrast to the millions of dollars spent by the big securities, banking and investment groups.

Congress left town for the holidays after passing a bill that will extend expired bond-related and other tax provisions retroactively through 2014, as well as a $1.01 trillion omnibus spending bill that will fund most government agencies through the end of fiscal 2015 but cut some grant programs.