WASHINGTON - IRS field agents should be prohibited from auditing the bonds of issuers that are seeking refunds of arbitrage payments, Richard Chirls, a lawyer with Orrick, Herrington & Sutcliffe, said at a conference here Friday.

But Marcus Owens, one of the Internal Revenue Service officials speaking at the conference, said IRS officials in Washington are not permitted to tell IRS field agents what audits they can or cannot conduct. Agency officials may, however, be able to address the audit issue in forthcoming guidelines advising agents how to process refund claims, Owens indicated.

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