To promote voluntary compliance with federal tax laws, Tax Exempt Bonds (TEB) has compiled material to educate and assist issuers and conduit borrowers as they navigate the hazards of defaulted or distressed tax-exempt, tax credit or direct pay debt. Note, however, that these materials should not be relied upon as legal authority. The Internal Revenue Code and applicable regulations are complex and these materials do not address every situation. Reissuance of Obligations Actions taken with respect to defaulted or distressed debt can inadvertently trigger a reissuance for federal tax purposes leading to the loss of tax exemption for the debt (or, in the case of tax credit or direct pay bonds, loss of the credit or subsidy). The reissuance rules apply to all tax-exempt, tax credit and direct pay bonds from a large bond issue to a small lease entered into to purchase equipment (for example, police cars) to a note held by a local bank. Reissuance of Tax Exempt Obligations: Some Basic Concepts provides an educational overview on reissuance. Sales or Leases of Bond-Financed Property In addition to reissuance, the sale or lease of property financed with tax-exempt bonds may make the bonds taxable or, in the case of tax credit or direct pay bonds, cause a loss of the credit or subsidy. Such actions can result in noncompliance with the qualified use requirements jeopardizing the tax-advantaged status of the bonds financing the property. However, certain self-correction options are available to remediate such noncompliance. Additional information is available at: TEB Self Correction: Some Basic Concepts Sale or Disposition of a Bond Financed IRC Section 501(c)(3) Facility Whatever the violation, TEB encourages voluntary compliance (including the VCAP Program) as a vehicle for expeditiously correcting self-discovered problems in bond issuances.