We Can Help You Meet the Challenges of Bond Arbitrage Reporting and Compliance
The issuance of debt is quite a challenge; however, you are faced with additional challenges after the issuance. These challenges include compliance with the IRS regulations, avoidance of penalties, and the loss of your bond’s exempt rating. We have been preparing special calculations for governmental entities since 1992 and have extensive experience and training in the area of arbitrage rebate tax. As a certified public accounting firm, we are familiar with and understand the finance issues and would like to help you face the challenges of ensuring compliance with arbitrage requirements.
Our Unique Approach to Arbitrage Calculation
Although the Internal Revenue Code Section 148 requires excess arbitrage earnings to be calculated and refunded at a minimum of every five years, we recommend this calculation be updated annually. In doing so, an annual calculation will help you monitor key issues with arbitrage including:
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Determine if a material liability has accrued
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Ensure sufficient funds are set aside for arbitrage liability
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Monitor investment earnings yield versus the debt yield
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Identify the cost of compliance against interest earnings
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Identify both positive and negative arbitrage
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Ensure compliance with IRS regulations and avoid penalties
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Provide oversight over the administration of the bond proceeds
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Provide security and assurance to bondholders of compliance
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Ensure proper transactional data is collected and maintained for the bond issue
- Identify possible additional earnings on your debt investment to cover interest costs
- Identify any excess earnings that should be set aside to refund the IRS and not spent by the project
In the course of preparing the calculation, we verify and tie-out all proceeds and help you identify and discover any additional funds.
