The IRS and you: IRS regulations, programs, and resources for state and local governments.

• Author: McDonald, Dustin
• Position: Federal Focus

From yield restriction and arbitrage rebate requirements to implementation of the Patient Protection and Affordable Care Act, state and local governments must comply with rules and regulations established by the Internal Revenue Service --but staying up to date on IRS proposed rules and locating and using IRS resources can be challenging. This article provides a summary of IRS actions and proposed rules and resources that state and local governments should be aware of, along with links to the many resources the IRS makes available to governments.

OFFICE OF TAX EXEMPT BONDS --FORUMS AND OUTREACH

The Tax Exempt Bonds Division is part of the Governmental Entities division of the IRS Tax Exempt and Governmental Entities Division. The Tax Exempt Bonds Division's mission is to administer the federal tax laws that apply to tax-advantaged bonds. As part of this mission, the IRS' Office of Tax Exempt Bonds organizes telephone forums to advance its education and outreach program and help stakeholders understand and comply with laws that apply to tax-advantaged bond issuances. The Tax Exempt Bonds Division announces these telephone forums on its website (http://www.irs.gov/TaxExempt-Bonds) and e-mails notifications to those who subscribe to the Tax Exempt Bond Community Update. If you would like to receive e-mail notifications about future telephone forums and other Tax Exempt Bond Division announcements, you can subscribe at http://www.irs.gov/Tax-Exempt-Bonds/Subscription-to-Tax-Exempt-BondCommunity- News. Over the past year, the division has presented three phone forums of note for state and local governments, which are discussed below. The presentations from these forums are available on the main Tax Exempt Bond Division webpage under the TEB Archives link.

Voluntary Compliance and VCAP. This forum provided a general overview of voluntary compliance for tax-advantaged bonds and included an overview of the IRS' Voluntary Closing Agreement Program. The Tax Exempt Bond Division administers VCAP to help governmental issuers resolve violations of the federal tax laws applicable to their tax-exempt bonds, tax credit bonds, or direct pay bonds. VCAP's primary objective is to encourage issuers and other parties to bond transactions to exercise due diligence in complying with applicable federal tax laws and to provide a means of correcting tax violations as expeditiously as possible. The presentation also discussed the resolution standards for identified violations under Internal Revenue Manual section 7.2.3. A presentation covering this phone forum is available at http://www.irs.gov/Tax-Exempt-Bonds/Telephone-ForumVoluntary- Compliance-and-VCAP.

The Tax Exempt Bond Division also released Publication 5091 on VCAP in June 2013. The publication--Voluntary Compliance for Tax-Exempt and Tax-Credit Bonds--highlights information that issuers should consider to ensure that their tax-advantaged bonds comply with related federal tax law requirements. It also summarizes the provisions of VCAP and emphasizes the importance of post-issuance compliance--tax law requirements apply throughout the life of tax-advantaged bonds.

The ongoing nature of these requirements means issuers must...