IRS relief regarding tax-exempt bonds (COVID-19)

IRS relief regarding tax-exempt bonds (COVID-19)

The IRS today released guidance—advance versions of Rev. Proc. 2020-21 and Notice 2020-25—concerning the rules regarding tax-exempt bonds and providing certain relief in response to the coronavirus (COVID-19) pandemic.

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  • Rev. Proc. 2020-21 [PDF 40 KB] provides temporary guidance regarding the public approval requirement under section 147(f) for tax-exempt qualified private activity bonds. The revenue procedure allows hearings to be held by teleconference for the purpose of satisfying the public approval requirement for the period beginning on May 4, 2020, and ending on December 31, 2020.

  • Notice 2020-25 [PDF 19 KB] temporarily expands the circumstances and time periods in which a tax-exempt bond that is purchased by its state or local governmental issuer is treated as continuing in effect without resulting in a reissuance or retirement of the purchased tax-exempt bond solely for purposes of section 103 and sections 141 through 150. The IRS notice recognizes of the need for liquidity and stability in the markets, including the short-term tax-exempt bond market, during “the current period of economic disruption,” and provides expanded time periods during which governmental issuers may purchase and hold their own tax-exempt qualified tender bonds and tax-exempt commercial paper. For purposes of Notice 2020-25, the term “permitted holding period” means calendar year 2020. 

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