Compliance and Exceptional Attention to Detail
We provide exceptional scrutiny and detailed reporting of the many complex elements associated with verification services, arbitrage rebate computation, post-issuance compliance, and completion of IRS Forms 8038-T, 8038-R and Schedule K (Form 990). Our Account Managers alert clients to key reporting dates and updates to the Treasury Regulations, while providing on-going support and client recordkeeping.
Verification Services
For pre-bond closing transactions, Bingham provides comprehensive verification services for refunding escrow funds, and cash defeasance transactions, ensuring mathematical accuracy. Using concentrated expertise and customized software programs, we confirm the adequacy of cash, escrow yield, and securities placed in escrow for the retirement of the bond issue(s). We perform all verifications with a multi-level analysis and quality review process, both prior to pricing and on the day of pricing.
Arbitrage Rebate Services
Bingham performs spending exception tracking and arbitrage rebate computations on a wide variety of bond structures, including fixed rate, variable rate, and variable rate with swaps. In addition to the governmental sector, we have specialized expertise in university, private and charter schools, retirement community, and not-for-profit [501(c)(3)s] issues. Our skilled professionals perform calculations with careful consideration of the potential to reduce rebate liability.
Review and Analysis
Following the bond closing, Bingham thoroughly reviews closing documents and investment activity to ascertain which bond issues and invested funds are subject to compliance reporting. For those bond issues and funds determined to be affected, our office moves forward to determine if exceptions are met, or if an arbitrage rebate and/or yield restriction calculation is required.
Post-Issuance Planning
Bingham encourages annual reviews for arbitrage rebate compliance. Annual reporting has proven beneficial for many reasons including: 1) preparing for potential installment period arbitrage rebate payments; 2) setting money aside (if needed) in a Rebate Account for the installment period payment; 3) making investment portfolio adjustments (if needed); and 4) retaining required bank and accounting records in a timely manner when personnel changes, accounting systems change or banks change during the five-year installment period.
Records and Procedures
Our office can provide guidance with developing an in-house check list or record-keeping system to help preserve the proper documentation for easier access to important bond documents and investment records. Having written procedures completed and implemented provides protection to the issuer in the event of an IRS audit and prevents lost documents and investment records.
Reporting
Bingham provides accurate detailed reports corresponding with evaluation dates, including a fifth-year comprehensive summary report and an IRS Form 8038-T if payment is due. If an exception is met, an Exception Report is provided. All reports are accompanied with our professional opinion guaranteeing mathematical accuracy and results consistent with Section 148(f) of the Internal Revenue Code.
Prepare IRS Forms
When an arbitrage rebate payment is due, Bingham prepares the 8038-T for our clients. If a client is eligible for a refund, Bingham prepares the 8038-R and the necessary paperwork needed for submitting the refund request to the IRS.
Nonprofit organizations [501(c)(3)] must complete IRS Schedule K (Form 990) regarding proceeds of tax- exempt bonds issued for their benefit. Incorrect completion could raise a red flag and potential for an IRS audit. Bingham provides the expertise and assistance needed to address complexities on Schedule K (Form 990) and ensure compliance, including comprehensive assessments of management practices and procedures.
Ongoing Support
Bingham maintains strong relationships with corporate trust banks, bond attorneys and financial advisors, enabling us to offer quality consultation and ongoing support in any matter relating to verification services, post-issuance compliance, arbitrage rebate, and related IRS forms.
Our experienced professionals assist in responding to any inquiries from the Internal Revenue Service. As necessitated by the Non-Arbitrage Certificate, Bingham retains all past reports for three to six years after the final redemption date.
