4.81.1  TEB Program

Manual Transmittal

October 02, 2012

Purpose

(1) This transmits the revised text and Table of Contents for IRM 4.81.1, Tax Exempt Bonds Program.

Material Changes

(1) Revised IRM 4.81.1 describes Tax Exempt Bonds program, goals and responsibilities. This IRM was revised to reflect the new Tax Exempt Bonds Compliance and Program Management group structure.

Effect on Other Documents

This supersedes IRM 4.81.1 dated November 1, 2009.

Audience

TE/GE

Effective Date

(10-02-2012)

Clifford J. Gannett
Director, Tax Exempt Bonds

4.81.1.1  (10-02-2012)
TEB Program

  1. The Tax Exempt Bonds (TEB) program is responsible for oversight, compliance and education related to arrangements that involve debt instruments or obligations of States, their political subdivisions and other entities entitled to issue tax-exempt and tax credit (including direct pay) obligations. These obligations include bonds, notes, installment sales, lease financing arrangements, and any other qualified arrangements under sections 103, 54, 54A-F, 54AA, and 7871 of the Internal Revenue Code. TEB also works closely with the Office of Associate Chief Counsel (FIP), the Office of Associate Chief Counsel (TE/GE), the Department of the Treasury, other offices within the Internal Revenue Service and other regulatory agencies concerning guidance and other matters impacting the tax-exempt bond community.

  2. For all sections under IRM 4.81, the following definitions apply:

    1. "Tax-advantaged bonds" are tax-exempt bonds, tax credit bonds, and direct pay bonds.

    2. "Tax-exempt bonds" are state or local bonds issued pursuant to section 103 of the Code, the interest on which is not included in the gross income of the holders thereof for federal income tax purposes.

    3. "Tax credit bonds" are 1) qualified tax credit bonds issued pursuant to sections 54, 54A, and either section 54B, 54C, 54D, 54E, or 54F, 1397E and 1400N(l) of the Code; and 2) build America bonds issued pursuant to section 54AA for which holders of such bonds are allowed credits against taxes with respect to a portion of the interest on such bonds.

    4. "Direct pay bonds" are 1) specified tax credit bonds issued pursuant to sections 6431(f), 54A and either section 54C, 54D, 54E, or 54F of the Code; 2) build America bonds issued pursuant to section 54AA(g)(2) of the Code; and 3) recovery zone economic development bonds issued pursuant to section 1400U-2 of the Code.

    5. "Tax-advantaged" status of a bond means that the bond is qualified to receive the tax benefit associated with its status.

  3. TEB consists of three components - the office of the Director, Compliance & Program Management (CPM) and Field Operations (FO). The responsibilities of each are outlined below in IRM 4.81.1.3.

4.81.1.2  (10-02-2012)
Goals

  1. The TEB program combines compliance and enforcement initiatives with outreach and educational activities to accomplish the following goals:

    1. Achieve significant levels of pre-issuance and post-issuance compliance;

    2. Respond promptly to abusive transactions;

    3. Increase the effective use of information returns;

    4. Encourage transaction participants to take an active role in ensuring that their bond issues comply with the Code and Regulations;

    5. Promote voluntary compliance with the requirements of the Code and Regulations;

    6. Maintain a specially trained workforce through recruitment, training and technical development;

    7. Assist the Department of the Treasury and Chief Counsel in identifying issues on which public guidance is needed, in developing Regulations and other published guidance of general applicability, and on various legislative matters.

4.81.1.3  (10-02-2012)
Responsibilities

  1. Each level of authority has specific as well as general responsibilities.

4.81.1.3.1  (10-02-2012)
Office of the Director, Tax Exempt Bonds (TEB)

  1. The Director, Tax Exempt Bonds, is responsible for:

    1. Carrying out the TEB Program;

    2. Coordinating and reviewing the activities of the Manager, TEB FO and the Manager, TEB CPM;

    3. Reviewing voluntary closing agreements from Manager, TEB CPM;

    4. Reviewing and executing closing agreements forwarded from field examinations by the Manager, TEB FO;

    5. Approving compliance initiatives, such as information gathering and examination projects;

    6. Reporting information, as appropriate and necessary, through both formal and informal means, to the Director, GE and to the TE/GE Division Commissioner;

    7. Approving and ensuring implementation of the annual work plan;

    8. Reviewing published guidance proposed by the Office of Chief Counsel and the Department of Treasury to determine the administrability of such guidance;

    9. Coordinating with other functional areas;

    10. Maintaining effective communications with the bond community to keep customers informed of TEB policies, procedures, laws and regulations by partnering with stakeholders in the bond industry; and

    11. Coordinating with the Securities and Exchange Commission (SEC) and other federal and state agencies.

4.81.1.3.2  (10-02-2012)
TEB Compliance & Program Management (CPM)

  1. The Manager, TEB CPM, is responsible for:

    1. Managing the TEB CPM group managers;

    2. Coordinating work within the CPM groups;

    3. Negotiating and executing closing agreements pursuant to the Voluntary Closing Agreement Program;

    4. Reviewing closing agreements in field examination cases in conjunction with the Manager, TEB FO and the Director, TEB;

    5. Providing quality review of examination cases;

    6. Formally reviewing examination cases designated as mandatory review cases, including cases involving technical advice requests and those cases being forwarded to Appeals;

    7. Coordinating special initiatives such as statistical samples and nationwide information gathering projects;

    8. Working with the Director, TEB and Manager, TEB FO, to formulate the annual work plan;

    9. Obtaining, classifying and delivering returns for field examination to the Manager, TEB FO;

    10. Determining whether waiver of penalty in lieu of loss of tax exemption will be granted in connection with untimely rebate payments;

    11. Coordinating a national education and outreach plan;

    12. Assisting the Director, TEB, on guidance projects;

    13. Collaborating with the Manager, TEB FO, to consider the merits of referrals to TEB;

    14. Maintaining information item/referral procedures and records;

    15. Developing customer education publications;

    16. Coordinating program training courses;

    17. Coordinating development and revisions to returns and any related processing changes;

    18. Coordinating with call site personnel, regarding training and what inquiries should be referred to TEB CPM;

    19. Coordinating return processing with TE/GE BSP and W&I Submissions Processing;

    20. Tracking legislative implementation;

    21. Maintaining the TEB Intranet and Internet websites;

    22. Using electronic research methods to support complex exam work; and

    23. Coordinating with TE/GE Research and Analysis to identify potential non-compliance.

  2. TEB CPM Group Managers are responsible for:

    1. Directing resources to achieve the annual workplan;

    2. Managing the performance of the employees within the respective groups;

    3. Assigning cases to agents and tax law specialists;

    4. Providing advice and guidance to CPM staff on voluntary compliance cases, rebate penalty determinations, correspondence examinations, compliance checks, and other assignments;

    5. Assisting CPM staff in the negotiation of closing agreements;

    6. Reviewing work in progress and closed cases for procedural and technical accuracy;

    7. Providing quality review of examination cases;

    8. Obtaining, classifying and delivering returns for examination to the Manager, TEB FO;

    9. Developing customer education publications;

    10. Maintaining information item/referral procedures and records;

    11. Coordinating development and revisions to returns and any related processing changes;

    12. Tracking legislative implementation;

    13. Coordinating return processing with TE/GE BSP and W&I Submissions Processing;

    14. Maintaining the TEB Intranet and Internet websites;

    15. Using electronic research methods to support complex exam work;

    16. Coordinating with TE/GE Research and Analysis to identify potential non-compliance;

    17. Coordinating with call site personnel regarding training and what inquires should be referred to TEB CPM;

    18. Identifying emerging issue(s) for nationwide consideration;

    19. Participating in the formulation of project initiatives and other work plan related programs;

    20. Identifying and elevating trends in noncompliance;

    21. Collaborating with TEB FO to provide support for technical activities involving return classification, examination initiatives and other special projects; and

    22. Participating in educational and outreach activities.

4.81.1.3.3  (10-02-2012)
TEB Field Operations

  1. The Manager, TEB FO is responsible for:

    1. Managing the TEB FO group managers;

    2. Reviewing closing agreements in examination cases in conjunction with the Manager, TEB CPM and forwarding them to the Director, TEB for review and execution;

    3. Reviewing closing agreements pursuant to the Voluntary Closing Agreement Program in conjunction with the Manager, TEB CPM, and the Director, TEB;

    4. Assigning cases to the field groups;

    5. Reviewing field group inventory to determine if work plan goals are being met;

    6. Working with the Director, TEB and Manager, TEB CPM to formulate the annual work plan;

    7. Coordinating work within field groups;

    8. Issuing instructions to field agents;

    9. Reviewing claims for refund of rebate paid and determining appropriateness of payment;

    10. Ensuring proper procedures are followed on closed cases;

    11. Formally reviewing examination cases involving technical advice requests and/or proposed adverse letters;

    12. Establishing ongoing lines of communication between TEB and State officials responsible for the issuance and compliance monitoring of state and local bonds;

    13. Collaborating with the Manager, TEB CPM to consider the merits of referrals to TEB and assigning selected cases to field groups; and

    14. Participating in educational and outreach activities.

  2. The TEB FO Group Managers are responsible for:

    1. Managing the performance of the employees within the respective groups;

    2. Assigning cases to agents;

    3. Providing advice and guidance to agents on examination work;

    4. Assisting agents in the negotiation of closing agreements;

    5. Reviewing work in progress and closed cases for procedural and technical accuracy;

    6. Forwarding closed cases to TEB CPM for final disposition;

    7. Directing resources to achieve the annual work plan;

    8. Identifying emerging issue(s) for nationwide consideration;

    9. Participating in the formulation of project initiatives and other work plan related programs;

    10. Identifying and elevating trends in noncompliance;

    11. Collaborating with TEB CPM to provide support for technical activities involving return classification, examination initiatives and other special projects;

    12. Establishing ongoing lines of communication between TEB and State officials responsible for the issuance and compliance monitoring of state and local bonds; and

    13. Participating in educational and outreach activities.


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