Tax

The Hood River Valley Parks and Recreation District in Oregon has disclosed that it is entering into the Internal Revenue Service’s voluntary closing agreement program to protect the tax-exempt status of $2.5 million of general obligation bonds it sold in 1998.

WASHINGTON — The Internal Revenue Service’s tax-exempt bond office this fiscal year plans to close 1,200 examinations — more than double its all time high of 581, its director says.

SANTA ANA PUEBLO, N.M. — Two senators plan to introduce legislation as soon as today to permanently extend a popular provision in last year’s stimulus law that was designed to encourage banks to buy municipal debt from small issuers but would expire at the end of the year without congressional action.

The Internal Revenue Service has found that the vast majority of colleges and universities have endowment funds invested in a wide range of securities.

In what could be a first of it’s kind action in the municipal bond market, the Internal Revenue Service has suspended tax-exempt bond attorney Michael W. McCall for at least 24 months from practicing before it for writing a false tax opinion.

Sen. Robert Menendez, D-N.J., has introduced legislation that would exempt all water and sewer exempt facility debt from the private-activity bond volume cap.

WASHINGTON — Congress could save billions of dollars by prohibiting tax-exempt colleges and universities from earning arbitrage indirectly through endowments that are invested at higher interest rates than what they are paying on their tax-exempt bonds, the Congressional Budget Office concluded in a report.

WASHINGTON — The Treasury Department released interim guidance yesterday instructing municipal issuers how to issue four tax-credit bonds as direct-subsidy bonds, as was authorized by a jobs law enacted in March.

Four major municipal market groups yesterday urged the Treasury Department to immediately issue interim guidance on how to determine issue price for Build America Bonds, warning that confusion surrounding the topic is having a “chilling effect” on the still-developing market.

BRADENTON, Fla. — The nonprofit Raymond F. Kravis Center for the Performing Arts Inc. in Palm Beach County, Fla., has paid $320,000 to the Internal Revenue Service to settle a violation of the Internal Revenue Code’s 5% limit on private use in a bond-financed facility.

New-issue prices for Build America Bonds remain a hot topic among municipal market participants, as several market groups last week were weighing asking the Treasury Department for clarification on the subject.

The Internal Revenue Service is auditing $445 million of industrial development revenue refunding bonds issued by Campbell County, Wyo., in 2007 in connection with a waste-coal power plant now set to be completed in 2013, five years later than originally proposed.

Louisiana disclosed this week that it has been providing information to the Internal Revenue Service for the last 13 months as part of an ongoing audit of $650 million of general obligation refunding bonds it sold in 2005.

DALLAS — The Louisiana State Bond Commission has temporarily postponed refunding $500 million of outstanding state general obligation bonds until the Internal Revenue Service completes a routine audit of some of the issues.

WASHINGTON — A lawmaker and a Treasury Department official Thursday pushed for a permanent extension of the Build America Bond program, but acknowledged that the greatest obstacle is finding a way to pay for it.

WASHINGTON — Sen. Ron Wyden, who recently caused a stir in the municipal bond market by proposing a tax-reform bill that would eliminate tax-exempt bonds and replace them with tax-credit bonds, said yesterday he is open to discussing possible modifications to the legislation with critics.

WASHINGTON — Build America Bond transaction participants are debating whether they need to do more to track BAB prices to avoid running afoul of statutory premium restrictions and jeopardizing the issuer’s subsidy payments or to respond to an Internal Revenue Service compliance check.

Massachusetts has $1.07 billion of private-activity borrowing capacity in 2010, with the state rolling over $482 million of unused PAB volume from 2009.

WASHINGTON — The mayor of Tucson has urged the Treasury Department to revise its criteria for determining what areas can use recovery zone bond financing, complaining that the current allocation method overlooks his city even though it has one of the highest unemployment rates in Arizona.

The Retama Development Corp. has agreed to pay the Internal Revenue Service an unspecified amount and convert $30.425 million of tax-exempt bonds into taxable debt to ensure $160.3 million of bonds it issued in 1993 and 1997 will remain tax-exempt.