Private Business Use Monitoring
The IRS has increased its focus on post-issuance and private business use limitation and, all indications are that this focus will continue to increase in the future. Therefore, it is no longer sufficient to say "we should be ok" with the private business use limitation.
If you tried to compute private business use before, you know how difficult and costly that process can be, especially when you need a number in a hurry.
- The DAC system demystifies the calculation of private business use by incorporating in one software application the complicated Treasury Regulations to financings of separate facilities with separate placed in service dates and separate economic lives. The DAC system also, with fast and easy inputs, tracks the impact of cost of issuance, redemptions, refunding, reimbursements, neutral costs, working capital expenditures, and construction period investment earnings.
- The DAC system prompts the user for the minimally necessary information and outputs private business use for the reporting period, actual private business use to date, and an estimated private business use percentage for the life of the financing. The system tracks usage by both percentage and dollar amount and alerts the user when specific limitations have been exceeded. The DAC system is not intended to replace legal assistance. Instead, it's a sophisticated calculator that allows the user to know, at any time, with exacting precision, the amount of private business use for any bond issue.
- The system even allows the user to model future numbers to plan ahead for expected changes in private use. Therefore, the DAC system allows the user to plan for the future and maximize the available private use amounts. The user can effectively model "what if" scenarios instantly and with complete confidence.
- But that's not all. The DAC system also doubles as a record retention system that fully complies with IRS Record Retention Requirements. Because of the long term nature of many tax-exempt bonds and the need to verify tax-law compliance throughout the term, special care should be given to record retention policies and procedures. The record retention system effectively organizes your tax compliance records and will complete your preparation for an IRS audit. The fully-secured system can even permit direct access to IRS agents when desired.
- The DAC system was developed in conjunction with the former Director of the IRS Tax Exempt Bonds audit program and the former instructor on private business use for IRS bond agents. Although not a guarantee of audit results, this is as close as we know how to get!
- The system is fast, easy and assures accurate results.