Please see below for the IRS announcement on the new VCAP process for 501(c)(3) bonds.
IRS Announcement 2015-2 Providing Simplified VCAP Process for Issuers of Qualified 501(c)(3) Bonds This announcement is scheduled to be published in Internal Revenue Bulletin 2015-3 dated Jan. 19. Announcement 2015-02 TEB Voluntary Closing Agreement Program: Relief from violation of qualified ownership and use requirements for qualified 501(c)(3) bonds. This Announcement provides a simplified process for issuers of qualified 501(c)(3) bonds, as defined below, to request a closing agreement in situations in which the borrower of the proceeds of the bonds received Prospective Reinstatement, as defined below, after its tax-exempt status was automatically revoked under section 6033(j)(1) of the Internal Revenue Code (the “Code”). This morning, the incoming Senate Finance Committee chairman Senator Orrin Hatch (R-UT), released an “in-depth analysis” of “Comprehensive Tax Reform for 2015 and Beyond” covering individual, business, and international tax reform. The report is attached and a press release is below. Tax exempt bonds are mentioned in terms of historical treatment in tax legislation.
In a purely symbolic move, and just hours after the release of the Senate Finance Committee Republican staff tax reform analysis, House Ways and Means Chairman Dave Camp (R-MI) this afternoon released his draft tax reform legislation as HR 1, a bill number that had been reserved for tax reform since the beginning of this congress. With the current congress set to finish its work any day now, the move by Camp was intended to memorialize the work he and his staff have done over the past two years to draft a tax reform proposal. The congressman said today that he has no plans to have the bill added to the House calendar before it adjourns. The bill contains the same bond restrictions as before, including eliminating private activity (and non profit) bonds. For reference, the bill is attached along with an introductory statement from Rep. Camp, along with a bill summary. A press release is below. As you know, tax reform could take more than one congress to achieve, but this is the opening move by congressional Republicans as they prepare to start the debate on tax reform next year. The Congressional Budget Office has issued a periodic report on revenue raising options.
As usual, eliminating private activity bonds, including nonprofit tax-exempt bonds, is listed, raising $30 billion over ten years (see below). Please consider this in the context that incoming Ways and Means Chairman Paul Ryan has made it clear that tax reform is on the table in the new Congress. Mr. Ryan’s own tax legislation would eliminate tax-exempt bonds. Our work is cut out for us next year. We remain vigilant this year. In other news, two members, Kind of Wisconsin and Luetkemeyer of Missouri, have co-sponsored our bank deductibility bill, HR 5199. Thanks to our Wisconsin and Missouri authorities. Option 57 Eliminate the Tax Exemption for New Qualified Private Activity Bonds Source: Staff of the Joint Committee on Taxation. Note: This option would take effect in January 2015. Estimates are relative to CBO’s April 2014 baseline projections. The U.S. tax code permits state and local governments to finance certain projects by issuing bonds whose interest payments are generally exempt from federal income taxes. For the most part, proceeds from tax-exempt bonds finance public projects, such as the construction of schools and highways. In some cases, however, state and local governments issue tax-exempt bonds—which are known as qualified private activity bonds—to fund private projects that provide at least some public benefits. Eligible projects include the construction or repair of infrastructure and certain activities, such as building schools and hospitals, undertaken by nonprofit organizations. This option would eliminate the tax exemption for new qualified private activity bonds. (Billions of dollars) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015-2019 2015-2024 Change in Revenues 0.1 0.5 1.0 1.6 2.3 3.2 4.1 5.0 5.9 6.5 5.5 30.2 Please contact me with any questions or comments. |
AuthorCharles A. Samuels Archives
December 2019
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