IRS; Bankruptcy

Question 1

What kind of compliance plan is required by the IRS?

Answer 1

A written procedure to monitor and remediate any nonqualified tax-exempt bonds.

Question 2

What would a compliance plan include?

Answer 2

POST-ISSUE COMPLIANCE

(1) Record retention policies,
(2) Private use monitoring,
(3) Arbitrage rebate and yield restriction,
(4) Expenditure of bond proceeds,
(5) Remedial actions and other issues that may arise over the life of a bond issue.

Question 3

Who is responsible for proper tax compliance in a Conduit Bond?

Answer 3

The issuer - LG. IRS treats LG as the taxpayer.

Question 4

What are 6 suggestions by the IRS for a Conduit Issuer to ensure post-issue compliance?

Answer 4

FINANCE

1. Issuer + borrower designate compliance officials.
2. Train + support officials.
3. Rvw borrower’s plan before issuing the bond.
4. Time schedule compliance steps.
5. Timely correct noncompliance.
6. Require borrower to notify compliance performed.

Question 5

Can Counties, Munis + taxing districts file bankruptcy?

Answer 5

Yes.

Question 6

Can a State file bankruptcy?

Answer 6

No.

Question 7

What Chapter bankruptcy would a LG file?

Answer 7

Chapter 9. Reorganization.