IRS Releases BABs Compliance Questionnaire, Plans to Audit Some BAB Issues
Feb 25, 2010
The Internal Revenue Service (IRS) announced that it has initiated a compliance project to evaluate post-issuance and record retention policies, procedures, and practices of issuers of Direct Pay Build America Bonds. The IRS is sending compliance check questionnaires to all entities that issued Direct Pay BABs, as indicated on Form 8038-G or Form 8038-CP.
The questionnaire addresses, among other things, the requirement that Direct Pay BABs be issued with no more than a de minimis amount of premium. During a panel discussion at the Tax & Securities Law Institute, Steve Chamberlin, Senior Manager of Compliance and Management in the IRS’ Office of Tax-Exempt Bonds said “We will be sending out examinations … to specifically inquire about compliance with this requirement.” Chamberlin added that the IRS has not determined how BABs will be selected for audits.
Copies of the questionnaire and cover letter are available on the IRS Tax Exempt Bond web site here.