2006-02
Inside This Issue:
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IRS Seeks Comments on Proposed Allocation Regulations
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Clean Renewable Energy Bond Volume Cap Allocation Information
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Treatment of Payments in Lieu of Taxes (PILOTS) Under Section 14
IRS Seeks Comments on Proposed Allocation Regulations
IRS gives notice of proposed regulations on the allocation of, and accounting for, tax-exempt bond proceeds for purposes of the private activity bond restrictions that apply under section 141 of the Code and that apply in modified form to qualified 501(c)(3) bonds under section 145 of the Code.
Written or electronic comments must be received by December 26, 2006. Requests to speak with outlines of topics to be discussed at the public hearing scheduled for January 11, 2007, must be received by December 26, 2006. Review the notice for the address to send submissions and for the location of the public hearing.
Clean Renewable Energy Bond Volume Cap Allocation Information
In IR-2006-181, the IRS announced that 610 projects for State and local governmental borrowers and electrical cooperative borrowers will receive volume cap allocations of authority to issued tax credit bonds under the new CREBs program.
IRC Section 54 authorizes the Secretary of the Treasury to allocate an $800 million volume cap in tax credit bonds to fund projects that can generate clean renewable energy. The Secretary determines the manner in which the allocation may be made except that more than $500 million may be allocated to qualified projects for borrowers that are State or local governmental entities and the balance is to be allocated to qualified projects for borrowers that are certain electrical cooperative companies.
Treatment of Payments in Lieu of Taxes (PILOTS) Under Section 14
The proposed regulations ( IRS Regulation 136806-06) concern modifying the standards for treating payments in lieu of taxes (PILOTs) as generally applicable taxes for purposes of the private security or payment test under section 141 of the Internal Revenue Code. The proposed regulations provide State and local government issuers with guidance for applying the private security or payment test.
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