Colleges and universities have used their tax-exempt status to borrow billions from the issuance of tax-exempt bonds to finance construction and other campus development projects. For bonds to retain their tax-exempt status however numerous detailed tax rules must be satisfied, especially rules regarding private business use of tax-exempt bond financed facilities and arbitrage. Colleges and universities, especially 501(c)(3) institutions, overlook those rules at their peril, since the consequences of violating them can include loss of the bonds’ tax exempt status, liability to the IRS or the bondholders, reputational damage and loss of future access to the tax-exempt bond market. In addition, beginning with tax years commencing on or after January 1, 2009, 501(c)(3) institutions need to complete in detail the new Schedule K to IRS Form 990, which requires submission of detailed bond compliance information, including in particular private business use calculations.

All of these factors dictate a well-planned and executed tax-exempt bond compliance effort. This program will review the rules governing post-issuance compliance for tax-exempt bonds, especially with respect to private business use, and IRS enforcement efforts with respect to college and university tax exempt bonds. The program will describe how to implement an effective post-issuance compliance program, including discussion of institutional experiences in setting up private business use compliance programs. The program materials will include examples of spreadsheets and other tools to promote compliance.

Take advantage of this opportunity to learn from experienced in-house and external counsel and introduce best practices to your institution’s post-issuance bond compliance program.

Panelists will include: Robert E. Bienstock, Yale University; A. L. (Lorry) Spitzer, Ropes & Gray, LLP, Boston, MA; and Peter Serreze, Ropes & Gray, LLP, Boston, MA