Butler Snow’s Dee P. Wisor was recently quoted in The Bond Buyer’s article Market groups likely to urge agencies to scrap political subdivision rules about his commentary on the U.S. Treasury and the IRS’s controversial proposed rules that seek to redefine which political subdivisions can issue tax-exempt bonds:
WASHINGTON – Municipal market participants will most likely recommend the Treasury Department and the Internal Revenue Service scrap their controversial proposed rules that seek to redefine which political subdivisions can issue tax-exempt bonds, several attorneys said on Monday.
The rules were listed among eight tax regulations that were either proposed, issued as temporary, or finalized between Jan. 1, 2016 and April 21, 2017 and found by Treasury to be significant and to warrant abandonment or major modifications under an executive order President Trump issued on April 21.
The list of eight was announced by the IRS on Friday in Notice 2017-38, which is to be published in the Internal Revenue Bulletin on July 24. Treasury asked market participants to submit public comments to it by Aug. 7 on whether the regulations “should be rescinded or modified.”
The political subdivision rules were proposed in February 2016 by Treasury and the IRS to redefine what constitutes a political subdivision that can issue tax-exempt bonds.
Under longstanding federal law and rules, an entity is a political subdivision that can issue tax-exempt bonds if it has the ability to exercise a substantial amount of at least one of three sovereign powers – taxation, eminent domain and policing.
But Treasury and the IRS, which became concerned that some political subdivisions were controlled by private developers, proposed adding two more requirements to that definition. They said a political subdivision must also be governmentally controlled and serve a governmental purpose “with no more than an incidental private benefit.”
“I think that practitioners will be happy to see that rule withdrawn,” said Dee Wisor, a lawyer at Butler Snow in Denver. “Practitioners would prefer to go back to what the rule was.”
To read more of The Bond Buyer’s coverage of Dee P. Wisor in its entirety, please visit the link below:
https://www.bondbuyer.com/news/treasury-targets-political-subdivision-rules-for-repeal-or-overhaul
