Services

Arbitrage Compliance Services

We apply our industry experience and technical expertise to help governmental entities and businesses ensure compliance with arbitrage rules and regulations.

What are Arbitrage Compliance Services?

Interest on tax-exempt municipal bonds is excludable from federal tax to the extent an issuer complies with the arbitrage provisions of the Internal Revenue Code. This task can be difficult. It requires a mastery of the arbitrage regulations and years of practical experience.

AEM Financial Solutions can help.

Compliance work is our specialty at AEM Financial Solutions. We have a deep bench of professionals with both financial and tax expertise, including over 17 years of arbitrage compliance experience.

We offer an array of services to assist issuers and conduit borrowers with their arbitrage responsibilities, including:

  •  Arbitrage Reporting 

Using a step-by-step approach for each issuance, our report indicates whether a rebate or yield reduction payment is due to the federal government and explains the methodologies used in our determination. To the extent a payment is due, we will prepare the requisite tax form and work with bond counsel to obtain a legal opinion as necessary. In addition, we will maintain a system of tracking future arbitrage reporting dates and make recommendations on record keeping practices.

  • Assistance with IRS Examinations

The IRS conducts examinations of tax-exempt municipal bonds every year. This process requires the issuer and any conduit borrower to provide all the information necessary to substantiate the tax-exempt status of an issue. We can help ensure that the information is complete and properly organized prior to submission.

  • Arbitrage Consulting

Issuers and conduit borrowers of tax-exempt bonds typically assign post-issuance responsibilities to a specific staff member. Our arbitrage consulting service provides these individuals with the training necessary to manage arbitrage compliance for their organization and to succeed in their position.

  • Post-Issuance Compliance Policy and Procedures

IRS Forms 8038 and 8038-G require issuers to indicate whether they have written procedures to ensure compliance with the arbitrage regulations and remediation of nonqualified bonds. Our professionals can assist issuers with drafting and implementing procedures to accomplish this end.

To learn more, contact our Director of Arbitrage Services, Gail Robertson with AEM Financial Solutions, today at 952.715.3023 or gail.robertson@aemfs.com