WASHINGTON - The dismissal of a lawsuit that blocked the Internal Revenue Service from taking enforcement action against a black box bond deal in California is a major victory for the government and should deter issuers from filing similar suits in the future, Justice Department lawyers said this week.

The lawsuit, which the Riverside County Housing Authority filed last year to prevent the Treasury Department and the IRS from collecting arbitrage or revoking the tax-exempt status of the $17.5 million Whitewater Garden bond issue, was dismissed last week by Judge Consuelo B. Marshall of the U.S. District Court of the Central District of California in Los Angeles.

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