Tax

Comptroller Thomas DiNapoli reported good news on New York State's fiscal-year revenues and spending, but also predicted that the optimism might soon fizzle.

The Internal Revenue Service granted a state agency a one-year extension of the expenditure period for qualified school construction bond proceeds, according to a recent private letter ruling.

The Internal Revenue Service has closed audits of bonds issued by North Las Vegas in 2006 and a Texas board in 2002 without any change to the tax-exempt status of the bonds. However, the IRS found arbitrage yield calculation errors with the city's bonds said if they are not fixed, penalties or a finding of taxable interest could ensue.

State tax revenues grew 5.7% in the fourth quarter of 2012 compared to the same time in 2011, the strongest in the last six quarters, the Rockefeller Institute of Government reported Wednesday.

Gov. Bobby Jindal's plan to lower the income tax rate and raise the sales tax gives lawmakers a chance at effective tax reform.

The Internal Revenue Service's tax-exempt bond office will process Build America Bond and other direct-pay bond payments manually for a two to three weeks to factor in 8.7% sequestration cuts, but are working to ensure this does not delay the payment process.

The taxable municipal bond market is attracting buyers as the tax-exempt municipal bond market and other taxable asset classes look expensive.

A cap on the value of tax-exempt municipal bond interest will likely be part of any tax reform discussions, a Treasury Department official said Monday.

Build America Bond payments will be delayed by up to six weeks and they will be cut by $171 million due to the automatic spending cuts that went into effect on Friday, according to the Office of Management and Budget.

The Internal Revenue Service has closed its audit of $162.53 million of general fee revenue bonds issued by Auburn University, Ala., in 2007 with no change the bonds' tax-exempt status.

Amid finger-pointing and political grandstanding, President Obama and congressional leaders failed to come to an agreement to avoid $85 billion in sweeping automatic budget cuts, which kicks in on Friday.

The National Governors Association sent two similar letters to President Obama and congressional leaders urging them to put their partisan bickering aside and come together to avoid the automatic, across-the-board budget cuts set to begin Friday.

State and local groups have one message for Washington: "Don't mess with our tax exempt bonds!"

The Internal Revenue Service has reinstated the tax-exempt status of LEAP Academy University Charter School, Inc. as of May 17, 2012, but not during the 18 months before that, thereby jeopardizing the tax-exemption of interest earned on its bonds during that time.

The House Ways and Means Committee chairman Dave Camp said Tuesday he wants to introduce a comprehensive tax reform bill that will be approved by the committee this year, but that he doesn't support the 28% cap that President Obama has proposed for tax exemption and other tax expenditures.

The Senate Finance Committee on Tuesday voted 19 to 5 to recommend that the full Senate confirm Jacob Lew as the next Treasury Secretary.

With sequestration looming, and the tax-exempt bond threatened, market experts at the National Municipal Bond Summit believe that alternative financing can be achieved with taxable bonds.

The Internal Revenue Service closed an audit of $39.24 million general obligation bonds issued in 2007 by Manchester, Conn., with no change to the bonds' tax-exempt status.

The Internal Revenue Service has declared as taxable interest earnings from tax-exempt bonds issued by an authority in Little Rock, Ark., but that may be the least of the bondholders' concerns because the bonds are in default and they may not receive any more interest payments.

Municipal market participants are encouraged but cautious about President Obama's proposal for a new type of taxable direct-pay bond called America Fast Forward bonds to finance the nation's infrastructure.