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June 2011

 

IRS Launches Compliance Check Questionnaire on Advance Refunding Issues

On May 24, the Internal Revenue Service (IRS) announced that it has initiated a new questionnaire for borrowers who have issued tax-exempt advance refunding bonds.  The questionnaire is extensive (8 pages, with 22 multi-part questions). Some of the topics covered include:

  • How the issuer decides to conduct an advance refunding;
  • Advance refunding policies;
  • Review of arbitrage yield restrictions and implementation restrictions;
  • Purchase of state and local government securities (SLGS) or other investments for the advance refunding escrow; and
  • Record keeping.

It will be sent to 300 government entities and other tax-exempt organizations that issued or benefited from advance refunding bonds between July 1, 2009 and June 30, 2010.

 

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Ehlers Market Commentary

 

Are you up to date with current market trends? If not, be sure to check out the Ehlers Market Commentary, which is released every other week.

Be sure to sign up to receive your email copy, or read past articles here

 

 

Wellness Challenge

by Alicia Aulwes, Bond

Sale Coordinator  

 

Ehlers recently participated in the "Shape Up" challenge, a national program designed to kick-off the arrival of Spring  and encourage people to create healthy habits.  It was a 6 week program focused on improving 5 daily habits.

 

One checkmark was given for each area completed areas such as eating 5 fruits/vegetables, sleeping 7 hours, taking 10 minutes to relax, getting 30 minutes of exercise and performing one healthy activity per day for yourself.  

 

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Ehlers

550 Warrenville Road

Suite 220

Lisle, IL 60532-4311

 

Phone: 630-271-3330

 

Greetings!

Welcome to the latest edition of The Advisor.

 

In this issue, there are two IRS-related articles to which I draw your attention. One article alerts you to a questionnaire going out to small group of government entities and other tax-exempt organizations, and the other article discusses being prepared for Federal examinations as it relates to Arbitrage.

 

Over the next three issues of The Advisor, we'll be focusing on three local communities who took advantage of opportunities to become even more successful. In this issue, we're highlighting the Village of Forsyth.

 

Thank you for sharing your successes with us!

 

 

Brad Townsend         

 

President and CEO 

 

Eight Preparation Steps for Referendums 

by Steve Larson, Senior Financial Advisor 

(630) 271-3331

 

Steve LarsonThe next available referendum in Illinois is Tuesday, March 20, 2012. The deadline for adopting a resolution or ordinance is Tuesday, January 3, 2012. 

 

With only six months to plan for a referendum, there are eight preparation steps you should consider prior to the January 3rd deadline.

 

There are many options available to you, and one thing you must keep in mind is involving the residents of your community and receiving their input along the way.

Before you decide if you will go to referendum, it's important to take the following steps before you make a decision.

 

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Opportunities for Success: A Review of Three Communities 

byBrad Townsend, Financial Advisor

(630) 271-3335

btownsend@ehlers-inc.com

 

Brad TownsendIllinois is filled with so many unique communities. What makes some communities successful and others striving for success? In this article, which will unfold over the next three issues of The Advisor, we will focus on three different communities who are at various levels of success, but all took the first step in making their vision a reality. 

  • The Village of Forsyth, who created a strategic plan to best apply resources toward maintaining a quality community.
  • The City of Charleston, who leveraged strategic retreat participation to a higher level by setting priorities to complete within 1 ½ years.
  • The Village of Park Forest, who managed community population and regional economic changes by taking a fresh look at all aspects of their community and its image.

Each municipality used a different process, but all encouraged participation, candid discussion, planning, action, and positive outcomes. Over the next three newsletters, we will focus on each community and what were key factors to their success.

 

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Arbitrage: Are You Prepared for Federal Examinations?

by Gail Robertson, Senior Financial Specialist, Arbitrage

(651) 697-8567

 

Gail Robertson

Interest received by bondholders is exempt from federal income tax only if the issuer complies with both the arbitrage rebate and yield restriction requirements of the Internal Revenue Code.

 

To comply, the issuer must either 1) remit profits from investing gross proceeds of the issue at a yield in excess of the bond yield to the Treasury every five years until the debt is no longer outstanding, or 2) satisfy exceptions to the rebate and yield restriction requirements. 

 

The IRS routinely examines debt issuances to ascertain compliance with the arbitrage requirements. Federal agents initiate the examination by sending issuers Form 4564 which contains a series of information document requests. Issuers must submit a response to the IRS within 21 days of the date on the form. 

 

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