IRS report - Avoiding troubled tax-advantaged bonds 

March 19:  The IRS Office of Tax-Exempt Bonds (TEB) released a report that identifies a number of considerations for issuers of tax-advantaged bonds.

The report—Avoiding Troubled Tax-Advantaged Bonds [PDF 722 KB]— was produced by the TEB Compliance Practice Research Team, and states that each bond transaction is accomplished through a process consisting of three phases, each with various considerations of which issuers need to be aware:


  • The transaction development phase
  • The transaction execution phase
  • The post-issuance phase

The report is TEB’s first step toward producing public resource products to assist issuers in avoiding “troubled transactions.”


The report states that it is not TEB’s intention for this effort to become a clearing house for a number of “best practices” guides that currently exist in the industry, but that TEB hopes that the tax-exempt bond community will use this information as a starting point from which to develop tools to facilitate issuer adoption of practices and procedures that work for the individual needs of issuers to avoid abusive or questionable transactions.


The IRS report solicits comments and feedback from the tax- advantaged municipal bond community.

KPMG observation

Although the report refers to “municipal bonds” throughout, it appears that the report is intended to be equally applicable to section 501(c)(3) bonds.



For more information, contact:


Rick Speizman, National Partner-In-Charge, KPMG’s Exempt Organizations Tax Practice (ExoTax)

+1 (202) 533-3084





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