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Business and Policy Areas
Business and Policy Areas

IRS Publishes Final Rules on Overpayments of Arbitrage Rebate on Tax-Exempt Bonds

November 14, 2014

The Internal Revenue Service is out with final rules regarding overpayments of arbitrage rebates.

The guidance, released November 12, states that an issuer may recover an overpayment if the taxpayer can substantiate that an overpayment occurred and files a claim no later than two years after the final arbitrage computation date. The final rules adopt regulations proposed in September 2013.

The final regulations also:

  • Adopt a rule that the IRS commissioner may request additional information to support a claim, specify a date for a return of that information, and deny the claim if the information is not returned by the date specified, or if the commissioner grants. the issuer an extension to provide the information, by the extension date
  • Establish procedures for administrative appeals with the IRS Appeals Office when a claim is denied.
  • Provide a minimum 21-day period for issuers to respond to any request by the commissioner for additional information.

The effective date of the regulations is November 13, 2014.


Mary Bachinger
Director, Tax Policy