The Internal Revenue Code was not written to be read easily. Honestly, some lawyers might admit they have trouble following and understanding it completely. That’s why the interpretations of tax law are sometimes challenged and the Tax Court rules and clarifies with more specificity. Exactly how does a tax-exempt debt issuer prepare to meet the complexity of post-issuance compliance and arbitrage calculation?

Here’s some GOOD NEWS! Bingham has a tried and true formula to make it easier.

  1. Be familiar with your documents, especially the Non-Arbitrage Certificate in your bond documents binder.
  2. Create a file to avoid backtracking through five years of “cold” paper trails when it’s time for calculation. You’ll be ready for the arbitrage rebate calculation immediately after your bond closing and prepared for the written procedures required by the IRS Form 8038-G.
  3. Schedule your calculation by notifying Bingham at least 60 days before each fifth-year anniversary to avoid late payment interest charges.
  4. Know your exceptions. If your bond counsel advises you that your issue meets an exception, find out which one. The most common are: Small Issuer, Six Month, Eighteen Month, and Two Year. Bingham can review your statements and provide a report demonstrating your compliance.
  5. Keep your calculations current to be aware of the amount of arbitrage you are earning. This affords you the option to restructure your investments accordingly. Bingham recommends to our clients to have calculations performed annually which saves you time, effort, and has proven less costly over the years a calculation is required.
  6. Ask questions. The more you understand about your rebate calculation, the better. Don’t hesitate to call a Bingham professional at (804) 288-5312 or send an email to for answers.

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