WASHINGTON -- The Internal Revenue Service was told by issuers and bond lawyers this week that its proposed reimbursement rules are overly restrictive and should be substantially revised or withdrawn and rewritten.

Associations representing the issuers and lawyers, in comments filed with the IRS, all said the proposed rules would be troublesome, costly, and in some cases unworkable for state and local governments. Most of the groups urged that the rules be simplified so they are more in line with existing reimbursement rules for private-activity bonds.

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