Scott Shaver featured in the "Ask the Legal Professionals" section of the Phoenix Business Journal

What is an IRS governmental bond audit?

The IRS has recently initiated many new audits of bonds issued by state and local governments.  Some bond issues are chosen for audit randomly and some are not.  However, the commencement of an audit is not necessarily an indication of any legal problem with a bond issue.  The IRS will request documents and other information regarding the bond issue to determine initial and ongoing compliance with federal tax laws.  Agents will often ask questions regarding complex tax law issues, which require specialized knowledge and experience to answer.  In addition, an IRS audit may require the government to file a report with the Municipal Securities Rulemaking Board pursuant to a continuing disclosure undertaking executed by the government at the time the bonds were issued.