IRS files to tax $55M port bond

Aug. 23, the Internal Revenue Service (IRS) issued a notice of proposed adverse determination to the Port of Port Arthur Navigation District of Jefferson County indicating that a $55 million bond issuance from 2017 will be considered taxable, though attorneys caution that such situations nearly always resolve without impact to the investors, reported BondBuyer.com.

According to the notice posted on the Electronic Municipal Market Access (EMMA), the infraction is related to “alleged noncompliance with requirements of Section 149(g) of the Internal Revenue Code, which prescribes certain expectations for the timely expenditure of tax-exempt bond proceeds.”

In the same notice, which is not a final determination, the port responds in that it, “believes it has complied with the applicable provisions of the federal IRS and intends to defend its position.”

Issuers have 30 days to make a request for an administrative appeal of its case, according to BondBuyer.com.