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Business and Policy Areas
Business and Policy Areas

IRS Examining Compliance with Qualified 501(c)(3) Bond Rules

September 4, 2007

The Tax Exempt Bonds division and the Exempt Organizations Compliance Area at IRS have announced a joint effort to take a look at the policies and procedures used by exempt organizations to comply with bonds rules. The Service will send questionnaires to more than 200 exempt organizations that indicated outstanding tax-exempt debt on their 2005 Form 990. 

The project will measure:

  • Record retention requirements
  • Qualified use of bond-financed property requirements
  • Arbitrage yield restriction and rebate requirements
  • Debt management policies and procedures
  • Awareness of voluntary compliance and educational resources

The compliance questionnaire has been published by the IRS. Following collection and analysis of the data, the Service will issue a report detailing its findings and any recommendations for follow-up initiatives.

Resource: The National Association of Bonds Lawyers and the Government Finance Officers Association have developed a checklist for bond counsel and issuers, addressing post-issuance compliance.