WASHINGTON -- Legislation may be needed to overcome a conflict between two sections of the tax code that would be disastrous for 501(c)(3) bonds if left unresolved and carried to an extreme, an IRS official said this week.

"We're aware of the issue. We've been looking at it. But we haven't come to any clear resolution of it," said Marcus Owens, director of the Internal Revenue Service's exempt organizations technical division. "It may be that it's something that Congress is going to have to take a look at.

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