Title
ADOPTION OF A RESOLUTION ESTABLISHING TAX EXEMPT FINANCING COMPLIANCE POLICY AND PROCEDURES.
Presented by: Chris Chronis, Chief Financial Officer.
RECOMMENDED ACTION: Adopt the resolution.
Body
For several years IRS officials have expressed concern that state and local government bond issuers do not have adequate written procedures to ensure that the ongoing tax requirements are met after financings have been closed. The IRS had been much less forthcoming when asked specifically what topics should be covered in these 'written procedures' and whether the procedures should go beyond the provisions already contained in the federal tax certificates adopted by issuers in conjunction with each bond issue. The IRS now has published an article that clarifies expectations and describes minimum post-issuance tax compliance standards for all issuers of tax-exempt debt and other 'tax-advantaged' debt, such as Build Americal Bonds. In the article, the IRS strongly suggests that issuers adopt a comprehensive set of tax compliance procedures that will govern all of the issuer's tax-exempt debt, rather than attempting to follow the tax compliance procedures mandated by the federal tax certificates or tax compliance agreements relating to specific bond issues. The article also outlines key characteristics that should be included in an issuer's written tax compliance procedures:
-- Due diligence review at regular intervals;
-- Identification of the official or employee of the issuer who is responsible for review;
-- Provision for training of the responsible official or employee;
-- Retention of adequate records to substantiate compliance (e.g., records relating to expenditure of proceeds);
-- Procedures reasonably expected to reveal noncompliance in a timely manner; and
-- Procedures ensuring that the issuer will take steps to correct noncompliance in a timely manner.
For many years, the County's tax compliance agreements and federal tax certificates have contained provi...
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