TEB Updates Program and Closing Agreements Procedures
The Internal Revenue Service has released to the public (IRM) Section 4.81.1 – TEB Program and Section 4.81.6 – Closing Agreements . Both sections were recently updated to reflect current procedures utilized by Tax Exempt Bonds (TEB) Agents and Specialists. These procedures were developed as a result of the efforts of a task force charged with re-engineering the TEB examination process.
The modifications to Section 4.81.1 are designed to indicate the primary functions and duties of the TEB organization. Section 4.81.6 of the IRM outlines TEB’s closing agreement procedures.
The Internal Revenue Service previously released to the public (IRM) Section 188.8.131.52 – Examination Process – Communicating Identified Issues, and Section 4.81.7 – Bondholder Referrals.
The modifications to Section 184.108.40.206 are designed to notify issuers and conduit borrowers of identified non-compliance issues early in the examination process. “Through the early discussion of issues and the opportunity for both parties to explain their positions, we hope to more timely reach resolution on cases and reduce the burden on those under examination,” said Clifford J. Gannett, Director of Tax Exempt Bonds. The IRM section also introduces Form 5701-TEB – Notice of Proposed Issue which replaces the preliminary adverse letter.
Section 4.81.7 was added to the IRM to reflect the establishment of TEB’s new Bondholder Unit. “While we have always taken efforts to identify bondholders when bonds are determined to be taxable, the establishment of a specific unit to handle this function should result in greater efficiency and effectiveness,” said Robert E. Henn, Manager, Tax Exempt Bonds Field Operations.
Previously, TEB released IRM Section 4.81.2 – Examination Selection , which outlines the case selection process TEB utilizes, and IRM Section 4.81.10 – Quality Review , which discusses the quality review program..