The Internal Revenue Service has closed its audit of $61.9 million in tax-exempt bonds sold by the Tarrant Regional Water District (TRWD) without taking any adverse actions.
The IRS recently notified the District that it had completed its review and has sent a letter of “no adverse determination and no change in tax status”. As a result, the IRS will not be seeking any changes to the tax-exempt status of the bonds.
The agency, which has the authority to initiate non-routine audits of bond sales, chose the TRWD 2016A bond sale for examination in March.
“This is good news because it shows we are conducting our financial operations at the highest level of professionalism and complying with federal tax laws,” said Leah King, TRWD’s board president. “This is an additional confirmation of the quality and standards that taxpayers should continue to expect from TRWD.”
The bonds were sold to refinance debt on various TRWD water supply projects.
The IRS selects bond issuances for audit for several reasons, but does not reveal why a bond sale is chosen.
The audit tasks include identifying areas of noncompliance, developing corrective strategies and assisting with those strategies. The IRS auditor also requested information related to the bonds including their current status, support for the use of the bond proceeds and arbitrage-related items.