WASHINGTON -- The Internal Revenue Service can continue examining the tax liability of investors who purchased the Riverside County Housing Authority's Whitewater Garden bonds, even though it is under a temporary restraining order issued by a U.S. district court, U.S. attorneys said this week.

"We can continue to do our thing up to the point of formally including the [bond] interest as taxable income" one U.S. attorney said. The IRS must stop short of actually taxing the holders of the $17.5 million Whitewater Garden issue under the restraining order, he said.

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