WASHINGTON - The Internal Revenue Service should adopt a standard that allows bond issues sold more than seven days rather than 31 days apart to be treated as separate issues under the tax laws, according to an American Bar Association task force.

The IRS has said in past letter-rulings that bond issues with common plans of financing or marketing and similar sources of payment or security must be issued at least 31 days apart to be treated as separate issues under certain arbitrage and private-activity bond requirements.

But the 31-day period is too long, according to the task force, because it limits the number of times an issuer can come to market, delays the availability of needed funds, and risks adverse changes in interest rates.

The task force is expected later this year to recommend that the IRS adopt a seven-day period as part of a new definition of bond "issue" that could be applied broadly under the tax law.

The reconmendations have been put into a draft discussion paper, which is expected to be approved after further revision and submitted to the IRS by the American Bar Association's committee on tax-exempt financing.

Under the recommended definition of "issue" in the draft paper, bond issues would be treated as separate issues if they are sold more than seven days apart, are sold pursuant to a common plan of financing, and are expected to be paid out of substantially the same source of funds.

In determining whether two issues have a common plan of financing, the paper says, the purposes of the financings and the nature of the security pledges should be reviewed. Cash flow and capital borrowings generally would be treated as separate issues under such a review, it says.

The size of an issue should be its aggregate price, or face amount. The date of the issue should be the first date bonds are exchanged for the purchase price, according to the paper.

The task force recommends in the draft paper that the IRS adopt a separate rule to ensure that tax-exempt bonds and taxable bonds are always treated as separate issues, even if they are sold at the same time.

The paper also recommends the IRS provide special treatment for draw-down notes and commercial paper, which differ from bonds in that they allow state and local issuers to draw funds as needed. A commercial paper issue, for example, should be considered issued on the date of the first advance and all commercial paper issued within 30, 60, 90, or 180 days from that should be treated as part of the same issue, the paper says.

The task force says in the draft paper that, even though "virtually all substantive rules in the tax-exempt bond area" depend to some degree on the definition of "issue," the IRS has no such definition that can be applied broadly under the tax law.

Bond lawyers have been left to rely on different definitions of "issue" that narrowly apply to certain arbitrage or private-activity bond requirements.

The IRS included one of these definitions in regulations issued in the late 1970s to prevent issuers from skirting arbitrage restrictions by blending the yields of two bond issues to get a higher bond yield.

Under these rules, which are used in calculating bond yield for compliance with rebate requirements, bond issues are treated as separate issues if they are issued at substantially the same time, are sold pursuant to a common plan of financing, and are to be paid out of substantially the same source of funds. In letter-rulings that were issued sued later, the IRS said "issued at substantially the same time." meant, issued at least 31 days apart.

The other definition, in Revenue Ruling 81-216, is used to determine if bond issues can be treated separately to qualify for tax-exemption as small industrial development bond issues. Under tax law provisions that expired in June but expected to be reinstated by Congress, private-activity bond issues used to finance manufacturing facilities are tax exempt if they are $10 million or less.

The revenue ruling, which was issued in 1981, says that bond issues are separate issues if they are sold at substantially the same time, pursuant to a common plan of marketing and at substantially the same rate of interest. Also a common or pooled security must be available or used to pay debt service on the bonds. The IRS, in letter-rulings, said that "sold at substantially the same time" meant sold at least 31 days apart.

The new definition of "issue" recommended by the bar association's tax-exempt financing committee's task force draws from and consolidates the definitions o-issue in these existing regulations and revenue ruling.

The draft paper also makes a few suggestions for further IRS consideration. It suggests, for example," that cash-flow and capital financings be treated as separate issues for purposes of meeting the six-month spending exemption from rebate requirements. Under the tax law, issuers generally are exempt from rebate if they spend their proceeds in six months. But issuers have worried that if they do a cash flow borrowing at the same time as a capital borrowing, neither issue would qualify for the exemption because proceeds from the capital borrowing typically would be spent over a three-year period.

Another suggestion ur-ges the IRS to allow separate yield calculations to be done for fixed and vartable components of a single issue.

The task force said also that the IRS should consider issuing separate guidance on pool bonds, which present unique considerations and were not covered by paper.

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