Tax

WASHINGTON - The Senate yesterday voted 61 to 37 to approve its $838 billion economic stimulus legislation, setting the stage for House and Senate conferees to begin to resolve the differences between their two bills, including six differing bond-related provisions.

WASHINGTON - The Senate late yesterday voted 61 to 36 to approve a procedural motion to limit debate on a $829 billion compromise economic stimulus bill that would revise two key muni bond provisions.

The Internal Revenue Service has begun auditing $99.3 million of student housing refunding revenue bonds issued in 2006 by the California Statewide Communities Development Authority.

The Montana Facility Finance Authority is appealing an Internal Revenue Service proposed adverse determination that concluded the interest earned from $14.15 million of variable-rate demand revenue bonds it issued to finance an expansion of a nursing home would be taxable.

WASHINGTON - Municipal market participants are concerned about the so-called taxable bond option programs proposed in the economic stimulus packages pending in the House and Senate, questioning how effective they would be and even worrying that they could ultimately undermine the tax-exempt bond market.

WASHINGTON - A federal court in Tennessee has rejected a law firm's claim that the Internal Revenue Service should be drastically limited in the monetary penalties it can assess under a section of the tax code that allows it to sanction bond lawyers, underwriters, and other transaction participants that engaged in abuse.

The Treasury Department and Internal Revenue Service have announced that they will use lower-rated securities to establish the daily credit rate for municipal tax-credit bonds, which should make the bonds more attractive to investors because they will get a bigger tax credit.

WASHINGTON - House members last night voted 244 to 188 to approve a $819 billion economic stimulus bill that they had amended to tighten transportation funding requirements for state and local governments.

WASHINGTON - Lawyers who are considering engaging in questionable tax practices for municipal bond transactions because the market turmoil has thrown deals into situations where there are no specific tax laws or rules should first check with the Internal Revenue Service, officials warned yesterday.

The Senate Appropriations Committee approved its $358 billion stimulus spending package yesterday, sending it to the full Senate without any amendments after less than three hours of committee discussion.

WASHINGTON - The Internal Revenue Service yesterday launched its post-issuance compliance check on governmental bond issuers, sending 200 of them questionnaires asking for detailed information about their compliance and record-retention procedures and practices.

A representative of a government accountability group yesterday warned that the Internal Revenue Service's proposed public approval requirements for private-activity bond-financed projects are "corrosive of democracy, transparency, and accountability," but three other groups said they support the proposals with minor modifications.

WASHINGTON - Senate Finance Committee chairman Max Baucus Friday unveiled a $275 billion economic stimulus tax package that contains many of the same municipal bond provisions as the bill approved by the House Ways and Means Committee the previous day, but with some changes.

WASHINGTON - The House Ways and Means Committee yesterday voted 24 to 13 along party lines to approve a revised $275 billion package of economic stimulus tax measures that would expand several bond provisions.

WASHINGTON - Municipal market participants generally are pleased with muni bond provisions in the economic stimulus tax package the House Ways and Means Committee plans to vote on today, which would provide private-activity bonds temporary relief from the alternative minimum tax.

The Internal Revenue Service has preliminarily determined that $68.1 million of tax allocation bonds issued by the Industry, Calif., Urban Development Agency in 2003 to finance the acquisition of property, as well as highway and water projects, are hedge bonds and therefore taxable.

WASHINGTON - House appropriations and tax committees yesterday described several municipal bond initiatives among the $550 billion of spending provisions and $275 billion of targeted tax cuts to be included in economic stimulus legislation, which lawmakers hope to take up beginning next week.

WASHINGTON - An Internal Revenue Service audit of bonds issued in connection with a Montana continuing care retirement facility could have widespread implications regarding whether refundable entrance fees common to CCRCs are so-called "replacement proceeds" whose investment must be yield-restricted for arbitrage purposes.

WASHINGTON - The Internal Revenue Service will use the information that tax-exempt hospitals submit to it under the new Form 990 to determine if they provide enough community benefits to remain tax-exempt, a top IRS official said this week.

NEW ORLEANS - The Treasury's priorities this fiscal year for municipal bond rules on financing of solid-waste disposal facilities and reissuance may have to be temporarily shelved because the department will have to focus on the forthcoming economic stimulus package and bringing new administration officials up to speed, an official said late Friday.