Among the new kinds of taxable bonds introduced by the American Recovery and Reinvestment Act of 2009 (ARRA) are Build America Bonds (BABs). BABs are tax credit bonds with a twist: in lieu of allowing investors to receive the tax credits, issuers may elect to receive direct federal subsidy payments as of each interest payment date to offset a portion of their interest expense.
On April 3, 2009, the Internal Revenue Service (IRS) issued Notice 2009-26 to provide interim guidance on the method for electing to issue BABs and the procedures issuers must follow to receive direct federal subsidy payments and report information on BABs. The following information is intended to serve as a general overview of the interim guidance and does not constitute an exhaustive discussion or legal advice.
IRS Issues Much-Anticipated Guidance on Build America Bonds
April 8, 2009
Among the new kinds of taxable bonds introduced by the American Recovery and Reinvestment Act of 2009 (ARRA) are Build America Bonds (BABs). BABs are tax credit bonds with a twist: in lieu of allowing investors to receive the tax credits, issuers may elect to receive direct federal subsidy payments as of each interest payment date to offset a portion of their interest expense.
On April 3, 2009, the Internal Revenue Service (IRS) issued Notice 2009-26 to provide interim guidance on the method for electing to issue BABs and the procedures issuers must follow to receive direct federal subsidy payments and report information on BABs. The following information is intended to serve as a general overview of the interim guidance and does not constitute an exhaustive discussion or legal advice.
Download
On April 3, 2009, the Internal Revenue Service (IRS) issued Notice 2009-26 to provide interim guidance on the method for electing to issue BABs and the procedures issuers must follow to receive direct federal subsidy payments and report information on BABs. The following information is intended to serve as a general overview of the interim guidance and does not constitute an exhaustive discussion or legal advice.