WASHINGTON - The Internal Revenue Service has asked industry officials for detailed information about embedded cap and inverse-floater bonds amid concerns that the new arbitrage rules may hamper or halt the way these products are currently structured, sources said this week.

IRS officials asked members of the Public Securities Association's municipal derivatives committee and their lawyers to provide the information after meeting with them last Friday to discuss their concerns about the rules, said the sources, who were knowledgeable about the meeting.

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