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Federal Tax - Structuring Transactions, Audits, Rebate, Post-Issuance Compliance

Structuring Transactions

One of the most complex areas in public finance is federal tax.  Our attorneys have decades of experience in structuring transactions in creative ways to make sure that government issuers achieve the benefits of tax exempt financing.  Whether working on a complex convention center or stadium project, a public power tenancy in common with its special rules or the myriad issues that arise when dealing with swaps or housing issues, Ice Miller tax lawyers have been there and done that in billions of dollars of tax exempt financings.  

IRS Audits

Ice Miller has extensive experience representing issuers and conduit borrowers whose bonds have been audited by the Internal Revenue Service.  We are uniquely qualified to represent issuers and conduit borrowers before the Internal Revenue Service because our lawyers who practice in this area also have substantial experience negotiating and closing all types of tax-exempt bond transactions.  Our experience in this area includes closing audits without penalty or fines, as well as negotiating settlement agreements.

  • The majority of the audits that Ice Miller has been involved with have closed with "no change" letters from the IRS.
  • We work on many audits for deals where we did not serve as bond counsel because of our reputation for being able to work with the IRS effectively and efficiently.
  • We have developed relationships with IRS agents across the country.

Post-Issuance Compliance

IRS scrutiny of tax compliance by issuers and conduit borrowers after a bond issue closes has never been greater.  Ice Miller is the law firm best positioned to provide clients with crucial advice as to continuing compliance with tax requirements through the maturity of the bond issue.  We have lawyers whose practices are dedicated to helping issuers and conduit borrowers remain in compliance with IRS regulations.

  • We are one of very few law firms that provide rebate opinion and calculation services so we are uniquely qualified to assist issuers with arbitrage rebate compliance which is a large part of post-issuance compliance.
  • Because of our large 501(c)(3) bond practice, we have assisted several conduit borrowers with Schedule K completion, including private use monitoring, which is a large part of post-issuance compliance.

Arbitrage Rebate

Since the adoption of the rebate provisions in the Tax Reform Act of 1986, Ice Miller has provided legal opinions and calculations to ensure compliance for issuers and conduct borrowers relating to the arbitrage rebate requirements under Section 148(f) of the Internal Revenue Code of 1986, as amended (the Code) and the regulations promulgated thereunder (the Regulations).  Section 148(f) of the Code mandates that issuers of tax-exempt bonds must pay earnings, if any, in excess of the yield on such bonds to the United States Treasury on a timely basis. Arbitrage compliance is a very hot topic for the IRS and in recent years the IRS has provided materials to issuers and conduit borrowers suggesting that written procedures to monitor the requirements of Section 148 should be implemented.

Ice Miller provides an array of arbitrage services to satisfy IRS requirements for all types of tax-exempt bonds including tax advantaged bonds such as Build America Bonds, Qualified School Construction Bonds and Qualified Energy Conservation Bonds.  Due to the vast expertise of the firm's municipal tax lawyers, we have the ability to quickly review the rebate issues for a particular bond issue and develop a rebate calculation strategy that meets the requirements of Section 148 of the Code and Regulations.  The firm's arbitrage rebate service prepares hundreds of calculations and opinions each year (including additional yield restriction calculations, if necessary, under Section 148(a) of the Code).  The firm also has an active practice in providing IRS audit services for arbitrage related matters and is proactive in identifying rebate recovery opportunities for issuers and conduit borrowers.  During the past two years, the firm's arbitrage service has generated over $5,600,000 in IRS rebate refunds for our rebate clients.



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