https://www.americancityandcounty.com/wp-content/themes/acc_child/assets/images/logo/footer-logo.png
  • Home
  • Co-op Solutions
  • Hybrid Work
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcast
    • Latest videos
    • Product Guides
  • Resources & Events
    • Back
    • Resources
    • Webinars
    • White Papers
    • IWCE 2022
    • How to Contribute
    • Municipal Cost Index – Archive
    • Equipment Watch Page
    • American City & County Awards
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Cookie Policy
    • Privacy Statement
    • Terms of Service
American City and County
  • NEWSLETTER
  • Home
  • Co-op Solutions
  • Hybrid Work
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcasts
    • Latest videos
    • Product Guides
  • Resources/Events
    • Back
    • Webinars
    • White Papers/eBooks
    • IWCE Expo
    • Calendar of Events
    • How to Contribute
    • American City & County Awards
    • Municipal Cost Index
    • Equipment Watch Page
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Cookie Policy
    • Privacy Stament
    • Terms of Service
  • newsletter
  • Administration
  • Economy & Finance
  • Procurement
  • Public Safety
  • Public Works & Utilities
  • Smart Cities & Technology
  • Magazine
acc.com

Commentaries


Commentary

Internal Revenue Service to begin new procedure for initiating tax-exempt bond audits

Internal Revenue Service to begin new procedure for initiating tax-exempt bond audits

Victoria Ozimek and Brian Teaff, public finance attorneys at Bracewell LLP, detail new IRS rules for initiating tax-exempt bond audits and how to navigate the changes.
  • Written by contributor
  • 11th April 2017

By Victoria Ozimek and Brian Teaff
 

In late 2016, the IRS Tax-Exempt and Government Entities Division (“TE/GE”) released a memorandum to its examiners outlining a new procedure for initiating audits of tax-exempt bonds.  The Commissioner of TE/GE recently noted that the change is meant to create a more streamlined, issue-focused exam process and confirmed that the new procedure will go into effect for audits opened on or after April 1, 2017.

The new procedure will change how an examiner initiates contact with an issuer regarding an audit.  Under current practice, an issuer’s first notice of the audit is by a mailed letter, which is usually accompanied by an “Information Document Request” (“IDR”) that typically requests certain documents relating to the bonds and sets forth a list of questions for the issuer to answer by a certain date.  Oftentimes, many of the questions/requests do not necessarily apply to the bonds under audit.  Sometimes, the bonds have already been redeemed.

Under the new procedure, an examiner will send an advisory letter notifying the issuer that a specific bond issue has been selected for audit and that the examiner will contact the issuer by telephone ten days after the date of the letter.  The purpose of the initial call will be to discuss the audit’s focus and the items that the examiner intends to request via a forthcoming IDR.  The appropriate amount of time to respond to the IDR will also be discussed during this telephone call.  Based on the issuer’s responses on the call, the stated goal is that the examiner will be able to better tailor the IDR to the request of information that is applicable to both the focus of the audit program and the factual circumstances of the particular bond issue. 

The new procedure hopefully will enhance efficiencies by streamlining IDRs and eliminating the need to produce documents and other information not relevant to the audit.  However, the new procedure does open up the possibility of a “cold call” from the IRS if the point of contact at the issuer (i.e., generally the person identified on the Form 8038 series filed in connection with the bonds) has not received or focused on the advisory letter prior to receiving the call.  Taking a call from the IRS for which the issuer is not prepared could inadvertently complicate the audit.

If an issuer receives correspondence from the IRS requesting a telephone call to discuss a specific bond issue, we recommend that, prior to scheduling that call, the issuer contact legal counsel to discuss the bond issue and/or execute a power of attorney that will allow legal counsel to participate on the call with the IRS.  Likewise, if an issuer receives a direct call from the IRS regarding the bond issue before the issuer has contacted legal counsel, we recommend that the issuer postpone the discussion of any substantive questions regarding the bond issue and reschedule the call with the IRS to allow for adequate preparation and consultation with legal counsel.

 

Victoria Ozimek is a member of Bracewell LLP’s Public Finance practice in Austin. Brian Teaff is a member of its Public Finance practice in Houston. Both can be reached respectively at [email protected] and [email protected].

Tags: Economy Commentaries Commentary

Most Recent


  • suburbs
    10 best suburbs for city-like living
    As more people are moving out to the suburbs, they still crave those city-living amenities like restaurants, shopping and engagement. So, suburban areas are adopting more urban aesthetics and principals, creating vibrant and connected communities. StorageCafe recently looked at the best U.S. suburbs with that urban flair, to see where people can find the right […]
  • cities
    Gallery: Annual index ranks America's top performing cities; most are in the West
    Starting with the pandemic and the economic uncertainty that came along with it, it’s been a difficult few years for cities across the United States. As a testament to the resiliency and commitment of public administrators, American cities continue to thrive—with many of the fastest growing communities located in the West, according to the Milken […]
  • Orlando, FL
    Gallery: Top 10 American cities for seasonal and summer jobs
    With Memorial Day weekend upcoming, Americans everywhere are gearing up for longer days, warmer nights and seasonal summer jobs to begin. A new ranking from WalletHub lists the top cities for summer work based on criteria like employment outlook, availability of summer jobs, median income for part-time workers, affordability, and downtown-friendlinesss. “For some people, especially […]
  • public trust
    With many cities facing a fiscal cliff as ARPA funding ends, debt ceiling debate continues on Capitol Hill
    As debate over the debt ceiling continues, cities and counties across the nation are facing an uncertain future as American Rescue Plan Act funding dries up. The federal government reached its spending cap of $31.4 trillion, previously set in 2021, in January. Since then, with lawmakers on Capitol Hill locked in impasse, the U.S. Department […]

Related Content

  • Prioritizing rapid restore leads to stronger ransomware attack recovery
  • Rethinking the ways cities can invest in vital neighborhoods
  • How to innovate and invest on a budget in state and local IT services
  • Treasury Department launches Coronavirus State and Local Fiscal Recovery Funds to deliver $350 billion in funding

WHITE PAPERS


5 reasons why Plan Examiners need Objective Trapeze

30th May 2023

7 Permitting & Licensing Fails Slowing Community Growth

24th May 2023

The Secret Ingredient to Local Government Employee Retention

23rd May 2023
view all

Webinars


How to Centralize and Build a Grants Management Process at your Organization

24th May 2023

Making Permitting Easier: What We’ve Learned Helping America’s Largest Cities Improve Their Permitting Process

16th May 2023

Digital Property Tax Collection: Tales from the Trenches of Modernization

16th May 2023
view all

Podcast


Young Leaders Episode 4 – Cyril Jefferson – City Councilman, High Point, North Carolina

13th October 2020

Young Leaders Episode 3 – Shannon Hardin – City Council President, Columbus, Ohio

27th July 2020

Young Leaders Episode 2 – Christian Williams – Development Services Planner, Goodyear, Ariz.

1st July 2020
view all

GALLERIES


10 best suburbs for city-like living

1st June 2023

Gallery: Annual index ranks America’s top performing cities; most are in the West

30th May 2023

Gallery: Top 10 American cities for seasonal and summer jobs

25th May 2023
view all

Twitter


AmerCityCounty

How decentralized identity technology can make access to government services more equitable dlvr.it/SqRHBF

9th June 2023
AmerCityCounty

Survey from U.S. Conference of Mayors details mental health crisis faced by cities dlvr.it/SqQffD

9th June 2023
AmerCityCounty

Federal government launches $11B in green energy grants for rural utilities dlvr.it/SqNFBH

8th June 2023
AmerCityCounty

State and Local Cybersecurity Grant Program: Where local governments must allocate funds to support the future of c… twitter.com/i/web/status/1…

8th June 2023
AmerCityCounty

Boston’s commuter rail system is outdated and needs an overhaul, according to advocacy report dlvr.it/SqKHmC

7th June 2023
AmerCityCounty

San Antonio-based study highlights effectiveness of urban farms dlvr.it/SqGDbh

6th June 2023
AmerCityCounty

Keeping reusable stuff out of landfills: Organization redistributes office furniture and more to nonprofits, other… twitter.com/i/web/status/1…

6th June 2023
AmerCityCounty

Report: Police response to homelessness is inherently punitive dlvr.it/SqCFwh

5th June 2023

Newsletters

Sign up for American City & County’s newsletters to receive regular news and information updates about local governments.

Resale Insights Dashboard

The Resale Insights Dashboard provides model-level data for the entire used equipment market to help you save time and money.

Municipal Cost Index

Updated monthly since 1978, our exclusive Municipal Cost Index shows the effects of inflation on the cost of providing municipal services

Media Kit and Advertising

Want to reach our digital audience? Learn more here.

DISCOVER MORE FROM INFORMA TECH

  • IWCE’s Urgent Communications
  • IWCE Expo

WORKING WITH US

  • About Us
  • Contact Us

FOLLOW American City and County ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2023 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.