Income taxes: Arbitrage and related restrictions— exempt bonds; correction,

[Federal Register: July 9, 1999 (Volume 64, Number 131)]

[Rules and Regulations]

[Page 37037-37038]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr09jy99-2]

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 8476]

RIN 1545-AR05; 1545-AP09

Arbitrage Restrictions on Tax-Exempt Bonds; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

SUMMARY: This document contains corrections to final regulations (TD 8476) which were published in the Federal Register on Friday, June 18, 1993 (58 FR 33510), relating to the arbitrage and related restrictions applicable to tax-exempt bonds issued by States and local governments.

DATES: This correction is effective December 30, 1998.

FOR FURTHER INFORMATION CONTACT: David White, (202) 622-3980 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The final regulations that are the subject of these corrections are under section 148 of the Internal Revenue Code.

Need for Correction

As published, the final regulations (TD 8476) contain errors which may prove to be misleading and are in need of clarification.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

Correction of Publication

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:

PART 1--INCOME TAXES

Paragraph 1. The authority citation for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 1.148-11 is amended by adding paragraphs (b)(4), (h) and (i) to read as follows:

Sec. 1.148-11 Effective dates.

* * * * *

(b) * * *

(4) No elective retroactive application for safe harbor for establishing fair market value for guaranteed investment contracts and investments purchased for a yield restricted defeasance escrow. The provisions of Secs. 1.148-5(d)(6)(iii) (relating to the safe harbor for establishing fair market value of guaranteed investment contracts and yield restricted defeasance escrow investments) and 1.148-5(e)(2)(iv) (relating to a special rule for yield restricted defeasance escrow investments) may not be applied to any bond sold before December 30, 1998. * * * * *

(h) Safe harbor for establishing fair market value for guaranteed investment contracts and investments purchased for a yield restricted defeasance escrow. The provisions of Sec. 1.148-5(d)(6)(iii) are applicable to bonds sold on or after March 1, 1999. Issuers may apply these provisions to bonds sold on or after December 30, 1998, and before March 1, 1999.

(i) Special rule for investments purchased for a yield restricted defeasance escrow. The provisions of Sec. 1.148-5(e)(2)(iv) are applicable to bonds sold on or after March 1, 1999. Issuers may apply these provisions to

[[Page 37038]]

bonds sold on or after December 30, 1998, and before March 1, 1999.

Cynthia E. Grigsby, Chief, Regulations Unit, Assistant Chief Counsel (Corporate).

[FR Doc. 99-17297Filed7-8-99;8:45am]

BILLLING CODE 4830-01-P