The Internal Revenue Service recently closed two audits of bonds issued in Colorado with no change to the bonds' tax-exempt statuses.
The results from the audits were disclosed in January on the Municipal Securities Rulemaking Board's EMMA system.
One of the audits was of series A-2, A-3, A-4 and A-5 single-family mortgage bonds issued by the Colorado Housing and Finance Authority in 2002. The bonds' total par amount at issuance was $53.07 million.
The other audit pertained to $42.82 million of bonds issued by the Colorado Health Facilities Authority bonds issued in 2007 for the Yampa Valley Medical Center.
Both audits began in September and were routine.
The Colorado Housing and Finance Authority bonds were issued to refund outstanding bonds and to finance mortgage loans for borrowers buying single-family homes.
A syndicate led by Lehman Brothers underwrote the series A-2, A-3 and A-4 bonds, and the series A-5 bonds were sold directly to an institutional investor. Sherman & Howard LLC was bond counsel, according to offering documents.
The bonds were audited as part of a project involving "arbitrage compliance in connection with the filing of a Form 8038-T," according to a September letter from the IRS. That form deals with arbitrage rebate.
The Colorado Health Facilities Authority's bonds were issued to refund bonds issued in 1997 and 1999 and to finance the expansion, renovation and equipping of an existing hospital facility. A.G. Edwards & Sons, Inc. was the underwriter and Sherman & Howard LLC was bond counsel, according to the official statement.
The audit's information document request in September asked for "focused advance refunding bond information."
In the "no change" letter sent to the authority, the IRS noted that an information return was filed using the wrong employer identification number. The agency advised that the correct number be used on forms filed in the future.
