Part III Administrative, Procedural, and Miscellaneous 26 CFR 601.601 Rules and Regulations (Also Part I, Section 148; 1.148-13T) Rev. Proc. 92-83
SECTION 1. PURPOSE
This revenue procedure provides guidance to issuers of tax-exempt bonds that seek to recover overpayments of amounts paid under sections 1.148-1 through 1.148.8 of the Income Regulations.
SEC. 2. BACKGROUND
.01 Section 103(a) of the Internal Revenue Code provides that gross income does
not include interest on any State or local bond. Under section 103(b)(2)
however, that interest is not excludable from gross income if the bond is an
arbitrage bond. Section 148(f) provides that a bond is treated as an arbitrage bond
if the issuer does not rebate to the United States the arbitrage profit earned
on the issue of which that bond is a part. .02 Under section 148(f)(4)(C), the rebate requirement does not apply to the
available construction proceeds of a construction issue if certain spending
requirements are met. Under section 148(4)(C)(vii), if those requirements are
not met, the issuer of a construction issue may elect to pay a penalty in lieu of
rebate with respect to the "available construction proceeds." Thus, the
issuer can comply with the penalty provisions rather than the rebate provisions
for those proceeds. The issuer may later choose to terminate this election
with another election under sections 148(f)(4)(C)(viii) and 148(f)(4)(C)(ix). .03 Sections 1.148-1 through 1.148-8 of the regulations provide rules to
determine the amount of rebatable arbitrage, the amount of the penalty in lieu of
rebate, the amounts necessary to terminate the penalty in lieu of rebate, and
the amount due for the late payment of any of these. .04 Section 148(i) of the Code authorizes the Secretary to prescribe regulations
that are necessary or appropriate to carry out the purposes of section 148. .05 Section 1.148-13T(a) of the temporary Income Tax Regulations provides that
an issuer may recover on overpayment of an amount paid under the rebate
provisions with respect to an issue by proving to the satisfaction of the
Commissioner that the issuer made the overpayment. Section 1.148-13T(b)
defines an overpayment, and section 1.148-13T(c) sets forth special rules for
recovery. .06 The regulatory guidance under sections 1.148-1 through 1.148-8 expires on
June 30, 1993. Those regulations will be further simplified and clarified to
provide future guidance, and the provisions regarding recoveries of
overpayments will be considered with those regulations for further simplification and
SEC. 3. SCOPE
This revenue procedure applies only to the recovery of overpayments of amounts paid under sections 1.148-1 through 1.148-8 of the regulations, and any successor provision to those sections.
SEC. 4.PROCEDURE FOR SEEKING RECOVERY
.01 Under section 1.148-13T(a), only issuers of bonds may recover overpayments
of amounts paid under sections 1.148-1 through 1.148-8 of the regulations.
To request a recovery of an overpayment with respect to an issue, an issuer
must submit, in the format (including the heading) and order specified below,
the requested information. If an authorized representative requests a
recovery on behalf on an issuer, a properly executed power of attorney must be
Request for Recovery of Amounts Paid Under Rebate Provisions
1. ISSUER'S NAME
2(a). ISSUER'S ADDRESS (number and street): 2(b). CITY, STATE, AND ZIP CODE:
3. EMPLOYER IDENTIFICATION NUMBER:
4. PERSON TO CONTACT FOR INFORMATION:
5. PHONE NUMBER OF PERSON TO CONTACT:
6. NAME OF THE ISSUE:
(If there is no name, provide other identification of the issue.)
7. CUSIP(Committee on Uniform Securities Identification Procedures) NUMBER
OF THE BOND WITH THE LATEST MATURITY:
(If the issue does not have a CUSIP number, write "none")
8. DATE OF ISSUE:
9. AMOUNT THAT HAS BEEN PAID TO THE UNITED STATES UNDER SS
1.148-1 THROUGH 1.148-8 OF THE REGULATIONS WITH RESPECT TO
10. AMOUNT OF REBATABLE ARBITRAGE AS OF THE MOST RECENT
INSTALLMENT COMPUTATION DATE WITH RESPECT TO THE ISSUE:
11. AMOUNT OTHERWISE REQUIRED TO BE PAID UNDER SS 1.148-1
THROUGH 1.148-8 OF THE REGULATIONS WITH RESPECT TO THE ISSUE
AS OF THE DATE THE REFUND IS FIRST REQUESTED:
12. AMOUNT REQUESTED TO BE RECOVERED, WHICH MAY BE LESS THAN
CIRCLE YES OR NO TO ANSWER QUESTION 13:
13(a). Yes No Was the overpayment paid as a penalty in lieu of rebate,
paid to terminate the penalty in lieu of rebate, or paid
because of a late payment of either of those payments? If no,
13(b). Yes No Has the fourth spending period elapsed? Skip questions
13(c) through (f).
13(c). Yes No Has the final computation date for the issue occurred? If
yes, skip questions 13(d) and 139e).
13(d). Yes No Will there be additional rebatable arbitrage for the issue? If
no, skip question 13(e).
13(e). Yes No Was the amount requested to be recovered paid solely as a
result of an arithmetic mistake?
13(f). Yes No Would the receipt of the amount requested to be recovered
result in additional rebatable arbitrage as of the date the
recovery is requested?
14. DESCRIPTION OF FACTS:
(Describe all the facts, including the mistake, that led to the overpayment. If
the overpayment is of an amount paid as a penalty in lieu of rebate, paid to
terminate the penalty in lieu of rebate, or paid because of a late payment of
either of those payments, include the relevant computations. If the
overpayment was paid as part of a rebate payment, include the relevant rebate
computations for the issue. Use additional pages if necessary.) 15. SCHEDULE OF PAYMENTS:
(Provide a schedule showing amounts and dates that payments were made to
the United States for the issue. A copy of all Forms 8038-T that accompanied
those payments must be attached. Use additional pages if necessary.) 16. SIGN UNDER PENALTIES OF PERJURY: Under penalties of perjury, I
declare that I have examined this request for recovery of overpayment
including accompanying documents, and to the best of my knowledge and
belief, the facts represented in support of the request are true, correct,
and complete. Please Sign Here: Date: Type or Print Name and Title:
(Must be signed by issuer.)
.02 The completed request must be sent to the Internal Revenue Service Center,
Attention: Accounting Control Section RACS Unit, Philadelphia, Pa.1 9255. .03 Although the information in Section 4.01 will generally be sufficient to
enable the Commissioner to determine whether a refund is appropriate
additional information may be necessary. If so, a representative from the Internal
Revenue service will contact the issuer or its representative. Processing of
the request will be suspended and the issuer will then have 21 calendar days
to submit that information. If all of the information is not timely received, a
letter will be sent explaining that the request recovery is deficient and that
processing of the request has terminated. This letter may be sent instead of a
request for additional information if the initial request is severely deficient.
SEC. 5. EFFECT OF RECOVERY
A payment to the issuer under this revenue procedure is not a determination by the Service that the requirements of section 148 have been met with respect to the issue.
SEC. 6. PROCEDURE IF RECOVERY TENTATIVELY DENIED
After a request is analyzed, if it appears the Service will deny the request and if a conference has been requested by the issuer, a conference will be held in the National Office. The issuer will be notified by telephone, if possible, of the time and place of the conference, which must be held within 21 calendar days after this contact. Since conference procedures are informal, no tape, stenographic, or other verbatim recording of a conference may be made.
SEC. 7. EFFECTIVE DATE
This revenue procedure applies upon publication.
The principal author of this revenue procedure is William P. Cejudo of the Office of Assistant Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure contact Mr. Cejudo on (202) 622-3980 (not a toll-free call).