The Bond Buyer
reported on a state audit of Beaumont, California that found the Southern California city failed to properly account for bond transactions of $626 million of bonds. The city was unable to provide the state controller's office with any accounting records for the bond transactions, and the current city management and employees did not have any information or records of bond transactions, according to the audit.
Polsinelli's Chuck Katz told The Bond Buyer
that "failure to have the records doesn't mean they did not comply with IRS restrictions."
"It does heighten the risk of a tax problem, because if they can't prove with the IRS needs them to prove, it could be problematic," Katz said.
Chuck Katz has more than 27 years of experience in the public finance field. He has served as bond, underwriter, tax, issuer or borrower counsel in connection with tax-exempt financing transactions in more than 25 states, including Illinois, Wisconsin, New York, Pennsylvania, New Jersey, Maine, New Hampshire, North Carolina, Florida, Georgia, Louisiana, Arizona, California, Washington, Delaware, Connecticut and West Virginia, as well as Puerto Rico and the U.S. Virgin Islands. A significant part of his practice focuses on the tax component of public finance transactions and counseling clients with respect to the various tax law requirements applicable to issuers and borrowers of tax-exempt proceeds.
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