Key Highlights this Week!
- Expect more IRS Audits in 2016 – TEB says half of FY 16 budget is for examinations – plus download the full report!
- $4.12 million Fine for 22 Firms in Round 2 of MCDC Enforcement – Round 3 expected – full article link
- Missing Debt Service Funds after Firing of Bond Trustee – full article link
- Tax Bill includes AMT Exemption for PABs but also 28% Cap – full article link
- Highway Trust Fund: McCarthy wants 6 Yr Bill in October – full article link
- Want FREE “Best Practices” CPE? Get 3 hours of dedicated Post Issuance Compliance training with CPE in November – registration details and link inside!
So…here goes…today’s Monday Muni Minutes!
Enjoy and have a great week! Deb
CURRENT EVENTS
IRS TEB: Half of FY 2016 Budget for Audits
Earlier in the year, the IRS announced that it expected to close 120 VCAP cases in 2015, more than double what it did the year 
before.
As we begin FY 2016, The IRS Tax Exempt and Government Entities (TE/GE) Division has another ambitious goal: 50% of its budget will go to IRS audits – with priority given to referrals and tips from whistle blowers.
Talk about doing more with less…
Three points of interest that issuers should note:
- Like 2015, the TE/GE plans to focus on the same 13 market segments
- IRS will work with TE-GE Research and Business Systems Planning
- “To expand the public information available for identifying sub-segments and on collecting data from the market segment exams to predict other fact patterns or issues that might give rise to additional sub-segments.”
- The IRS will also be reinstituting the compliance check/soft-letter program
- “Using limited resources, this program will provide broader coverage of returns than could be provided solely through examinations, but may lead to some examinations that we might not otherwise have conducted.”
Here’s what else we can expect in 2016…
After audits, about 30% of TEB’s resources will cover VCAPs, with another 15% going to customer education and outreach efforts – focused on Form 8038, arbitrage for infrequent issuers and training on management contracts. The remainder of its resources is expected to focus on direct-pay bond activities.
The IRS says it is really focusing on continuous improvement, knowledge management as well as data-driven decision-making as they continue to deal with budget cuts and an expected 18% attrition rate for 2016.
You can download the TE/GE Priorities for FY 2016 Report here.
[Editor’s Note: This Bond Buyer article and the IRS Report clearly nail the single largest of the three main fears the Issuer 2 Issuer member “PIC Essentials – What’s Next” survey respondents addressed – an IRS or SEC Exam. I will be addressing audit experiences at the November conference in AZ – see details below. You can also get a line-by-line walk through of an actual IDR (from the issuer perspective) in session 1 of PIC-Essentials: The Audit-Proven Blueprint.]
OUT & ABOUT
Conferences:
There are about 30 conferences and regional events for the second half of 2015…
You can go to this Bond Buyer link to review what’s coming up and register! 
Resources:
Download NABL’s “Crafting Disclosure Policies” Report
IRS Interim Guidance on BABs and Other Direct-Pay Bonds
IRS 39-Page Memo TE/GE-04-0715-0019
See the full article in the August 3rd Edition of the Muni Minutes!
Replay: Webinar: MCDC – What Comes Next for Muni Underwriters
By: DIVER by Lumesis and hosted by the Bond Buyer
IT was AWESOME! In case you missed it…
Here is the replay link and the slides.
Munivestor.com
Track, search, analyze and keep up on critical bond news – looking at it from the bondholder’s perspective.
On-Demand Post Issuance Compliance Training for Issuers
“Compliance Basics” – a FREE, 3-part video Compliance Framework training, plus the Monday Muni Minutes.
Just Released – with a valuable and amazingly cost-effective “team learning” option!
NEW In-Depth Training, PIC Essentials: The Audit-Proven Blueprint – covering The IDR – Form 4564, Project Accounting Boot Camp and our hot-button friend, PBU!
On-Demand Webinar
Resource: On Demand Replay of Continuing Disclosure after MCDC
Slides: Final Slide Deck for Continuing Disclosure after MCDC
Muni Market Minute Updates
(Quick news bits on topics we’ve covered in earlier MMM editions!)
A quick note: While my shoulder is recovering over the next three or four months, items of interest here will be shorter and, if allowable, links to the full article will be provided for more detailed information.
Round 2 – $4.12 Million in MCDC Settlements for 22 Firms…and Round 3 expected before Issuers
On Wednesday morning, we sent out a special e-mail bulletin with the SEC press release regarding this Round 2 settlement, 
including the filings.
You can read that bulletin here.
Later in the week, The Bond Buyer shared an article providing further details, as well as an indication in another article that a “round 3” could be coming…
Why does a “round 3” seem likely?
Three big names appear to be missing from the MCDC Enforcement so far, namely Bank of America Merrill Lynch (BAML), Barclays Capital and Wells Fargo & Co.
You can read the full open Bond Buyer article here.
SEC Administrative Proceedings can be viewed here. Look for September 30, 2015 under Third Quarter and “Certain Municipal Securities Underwritings”
Tax Bill Includes AMT Exemption for PABs, but also 28% Cap
A large 299-page tax relief bill H.R. 3555, called “Jobs! Jobs! Job! Act of 2015” proposes to exempt PABs from the AMT tax through 2018, repeal sequestration AND create an infrastructure bank.
While the repeal of sequestration could have a positive impact on BABs subsidies, the 28% cap on PABs disappointed many muni experts.
You can read the full open Bond Buyer article here.
Mystery: $2 Million in Debt Reserves Missing after Bond Trustee Fired
The hunt is on for missing debt service reserve funds from at least 10 different deals going back more than a decade…
While the Trustee Bank scrambles to figure out what happened between the fired executive and the borrower, bondholders are left holding the bag…
And it’s empty!
You can read the full open Bond Buyer article here.
Highway Trust Fund: Six Year Bill Expected in October?
Over the last several months, we have shared the ups, downs and stalls regarding the beleaguered Federal Highway Trust Fund, which provides a significant portion of matching and grant dollars to the states for large infrastructure projects.
After more than 30 short-term fixes, is a long-term solution in sight? It looks promising, but already we are hearing the familiar sounds of dissention. What do you think will happen?
You can read the full open Bond Buyer article here.
[Editor’s Note: There were lots of neat open article topics this week in the Bond Buyer – with full links above – enjoy!]
Due to high demand, we created PIC Basics as a free subscriber resource and then PIC Essentials – The Audit-Proven Blueprint to provide practical, hands-on tools you can use.
Solving the Compliance Puzzle is GREAT for Your Bottom Line!
We have also spoken at local and regional seminars as well as conducted numerous virtual interactive conference sessions…with more to come!
Again, thanks to everyone who participated in the PIC Essentials: Next Steps Survey! We really appreciated your thoughtful comments and the obvious desire for practical compliance information you can use.
So, we have already started working on quarterly trainings to address your three biggest fears – and I am working with a couple of professionals who will likely join me in the sessions as well.
Given the recent news and the IRS’s focus for 2016, our next three trainings will be:
- Beefier “inside the issuer trenches” look at what you need to have in place BEFORE an IRS or SEC audit
- Succession planning – stopping the compliance “brain drain”
- Streamlining – including some cool policy and procedures tips!
Stay tuned for more information (and maybe a few more questions) in the next few weeks!
In the meantime…
Remember: Take small bites. For more information or other resources, check out our Knowledge Library. You can also ask a question 
in the comments section or reach out to us privately via e-mail and we’ll do our best to help.
You are welcome to download my nationally published AFP article, “A Taxing Dilemma.” In it, I share how we, as issuers, can systematically do a better job of understanding and managing our compliance programs. I think you will see strong similarities in what I experienced and what the IRS and SEC are focusing on…
Want FREE dedicated Post Issuance Compliance CPE?
If you or fellow issuer friends are going to be in the Phoenix, AZ area on November 16th, there will be a FREE 3 hour CPE-eligible post issuance compliance best practices training seminar – with a complimentary networking reception following the training! And yes, I will be one of the five expert guest panelists!
Here is the downloadable flyer and registration link!
We hope you found this week’s edition of the Monday Muni Minutes valuable and informative.
We really do look forward to your feedback – and to provide the best content possible.
Have a GREAT week!
In closing, we are so excited that PIC Essentials: the Audit-Proven Blueprint is now available! A special welcome to members who joined us. We look forward to your comments, questions and chatting with you in the Private Facebook Group – Club PIC!
NOTE: You can still join the learning group here: PIC Essentials: the Audit-Proven Blueprint.
Plus, as we believe so strongly in the team approach to success, we are offering a tremendous “team discount,” where you and four additional compliance members within your agency or company can join the series right along with you…for only $70 more!
We hope you found this week’s edition of the Monday Muni Minutes valuable and informative.
Chat soon!
As always, your comments are welcome…scroll down and let us know what you think about any of the articles!
To your compliance success,
Debbie
The greatest compliment you can pay us is to share this newsletter with your issuer friends….
P.S. Enjoy reading the Monday Muni Minutes each week? Invite your issuer friends to join us on Issuer 2 Issuer so they can get their free online training, PIC Basics! They will also get the Monday Muni Minutes delivered directly to their inbox as well as receive a special “new member” discount offer on the PIC Essentials training!
P.P.S. PIC Essentials: the Audit-Proven Blueprint is now available! You can sign up for the informative, on-demand webinar series by clicking above! Read about the “Team Discount” above! It’s truly a great deal.
P.P.S. Want a one-click way to get faster information? If you are on LinkedIn, you can get access to breaking muni news articles as well as interesting compliance tips and resources, posted by us during the week. Join our private LinkedIn Group Page, and follow us on our Company Page.