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U.S. District Court of D.C. Sets Aside the Accumulator Adjustment Rule

On May 17, 2022, the U.S. District Court for the District of Columbia ruled in favor of the plaintiff pharmaceutical manufacturer trade group in Pharmaceutical Research and
Manufacturers of America (“PhRMA”) vs. Becerra
in its challenge of the accumulator adjustment rule issued by the Center for Medicare & Medicaid Services in 2020 and set to take effect on January 1, 2023.

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Do You Know Where Your Tax-Exempt Bond Records Are?


Time to Read: 1 minutes Practices: Health Care

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On August 21, the IRS issued its long-awaited tax-exempt bond financings “compliance check questionnaire,” which has reportedly been mailed to hundreds of tax-exempt borrowers across the country, including universities, hospitals, and cultural organizations.

As anticipated, the questionnaire seeks detailed information about a borrower’s record-keeping and compliance assurance practices. For a copy of our previous Client Alert about this matter, which encouraged the adoption of an appropriate record-keeping policy, click here. If you have not yet adopted such a policy, you may wish to consider doing so at this time.

Why does this matter? Tax-exempt bonds are subject to post-closing operational requirements until the bonds are redeemed, such as limitations on “private use” of bond-financed property. The IRS has the authority to revoke retroactively the tax-exempt status of bonds issued on behalf of any borrower that fails to comply with these requirements. Any threatened or actual revocation of the tax-exempt status of a non-profit organization’s bonds may have a material, adverse effect on that organization’s access to and cost of capital, in addition to the expense of defending against such action and potential penalties.

How to find out more: On September 7, 2007, Ropes & Gray will review the questionnaire and suggest compliance strategies in an educational teleconference.

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For further information, please contact your usual Ropes & Gray lawyer.

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