IRS Releases Guidance on ARRA Bond Provisions

The American Recovery & Reinvestment Act of 2009 (ARRA) created several new types of tax-exempt bonds and tax credit bonds under the Internal Revenue Code. Of particular note, the ARRA created new tax incentives for certain taxable governmental bonds called Build America Bonds and Recovery Zone Economic Development Bonds whereby the governmental issuer of such bonds may elect (in lieu of issuing tax-exempt bonds) to receive a direct refundable credit payment from the Federal government equal to a percentage of the interest payments on these bonds.

The latest guidance, forms and information on the ARRA bond provisions is available at the links below. For more information about other ARRA tax provisions, please visit ARRA information page.

Build America Bonds & Recovery Zone Economic Development Bonds

Notice 2009-26 (Build America Bonds and Direct Payment Subsidy Implementation)

This notice provides guidance on the new tax incentives for Build America Bonds under section 54AA of the Internal Revenue Code and the implementation plans for the refundable credit payment procedures for these bonds. The notice also includes guidance on the modified Build America Bond program for Recovery Zone Economic Development Bonds under section 1400U-2 of the Code.

Form 8038-CP – Return for Credit Payments to Issuers of Qualified Bonds

Governmental issuers of qualified Build America Bonds and Recovery Zone Economic Development Bonds must submit this form to request refundable credit payments payable under section 6431 of the Internal Revenue Code. Instructions for Form 8038-CP – Return for Credit Payments to Issuers of Qualified Bonds.

IRS News Release, IR-2009-33, April 3, 2009 (IRS Issues Guidance on New Build America Bonds)

Education Related Bond Provisions

Notice 2009-30 (Qualified Zone Academy Bond Allocations for 2008 and 2009)

This notice provides guidance on qualified tax credit bonds called Qualified Zone Academy Bonds (QZABs) under section 54E of the Internal Revenue Code. The notice sets forth the amount of QZABs that may be issued within each State for each of the calendar years 2008 and 2009. QZABs may be issued to finance certain expenditures relating to a qualified zone academy established by a local education agency.

Notice 2009-35 (Qualified School Construction Bond Allocations for 2009)

This notice provides guidance on qualified tax credit bonds called Qualified School Construction Bonds (QSCBs) under section 54F of the Internal Revenue Code. The notice sets forth the amount of QSCBs that may be issued by each State and large local education agency in 2009. QSCBs may be issued to finance certain construction and land acquisition expenditures relating to public school facilities.

Energy Related Bond Provisions

Notice 2009-29 (Qualified Energy Conservation Bond Allocations for 2009)

This notice provides guidance on qualified tax credit bonds called Qualified Energy Conservation Bonds (QECBs) under section 54D of the Internal Revenue Code. The notice sets forth the amount of QECBs that may be issued for each State. QECBs may be issued to finance projects designed to reduce greenhouse gas emissions.

Notice 2009-33 (New Clean Renewable Energy Bonds Application and Requirements)

This notice provides guidance on and solicits applications for authority to issue qualified tax credit bonds called New Clean Renewable Energy Bonds (New CREBs) under section 54C of the Internal Revenue Code to finance certain clean renewable energy facilities described under section 45(d) of the Code. There is a national limitation of $2.4 billion of volume of New CREBs which the IRS may allocate to qualified issuers.  Application for Notice 2009-33 (New Clean Renewable Energy Bonds) – Rich Text Format.