Ann M. Murphy, Retired Partner

Publications & Media

Post-Issuance Compliance Policy for Tax-Exempt and Tax-Advantaged Obligations

Public Finance Law Update Elizabeth S. Blutstein, John W. Daniels, Julianna Ebert, Ann M. Murphy, Brian G. Lanser, Jeff Peelen, Jennifer V. Powers, Michael L. Roshar, Rebecca A. Speckhard, Allison M. Buchanan, Bridgette DeToro, Alexander J. Gore

Compliance with the requirements for tax-exempt and tax-advantaged financing does not end at the closing. In fact, the issuer's responsibility to monitor and comply with the federal tax requirements is only beginning when the bonds are issued.

The IRS has stressed the importance of having written compliance policies in place. As those of you who have issued obligations recently will have seen, the newly revised Federal Information Return (Form 8038-G) specifically asks whether the issuer has adopted written procedures for compliance with arbitrage rules and remedial action requirements. In addition, the IRS has indicated that issuers who have such policies in place will receive more favorable treatment in the event that there is a tax problem with respect to one of their issues.

The Tax Exemption Certificate and Post-Closing Compliance Checklist prepared in connection with issues for which Quarles & Brady serves as bond counsel establish the requirements and procedures with which an issuer must comply in connection with a particular issue. However, in light of the increased emphasis by the IRS on the need for issuers to have written procedures for compliance with tax requirements, it is advisable for issuers to adopt general policies and procedures applicable to all its issues. Attached is an example of such a policy. For issuers who do not already have a policy in place, we recommend that they review this policy template and modify it as necessary to fit their particular circumstances. The policy should then be approved by the issuer's governing body and implemented by the issuer's staff.

If you have questions or require additional assistance, please contact any of the attorneys in Quarles & Brady's Public Finance Group.


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