IRS Audits

Governmental entities are proficient in municipal accounting rules but are often unfamiliar with the numerous accounting, transaction and tax rules that are specific to tax-exempt and credit bonds. As a result, governmental entities have often unknowingly violated tax rules placing their bonds in jeopardy of a retroactive loss of tax-exempt status, significant liability to the Internal Revenue Service, a damaged reputation and higher interest costs for future issuances. The IRS has taken notice of the violations and has in turn significantly increased their audit scope. Audits that used to be 1 ½ pages have expanded to 5-6 pages and require an extensive amount of resources and expertise to complete.