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Instrucciones del formulario 8038-T

Instrucciones para el formulario 8038-T, Arbitrage Rebate, Yield Reduction, y Penalty en Lieu de Arbitrage Rebate

Rev. Octubre 2021

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  • Formulario 8038- T - Arbitrage Rebate, Yield Reduction and Penalty in Lieu of Arbitrage Rebate
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Department of the Treasury  
Internal Revenue Service  
Instructions for Form 8038-T  
(Rev. October 2021)  
Arbitrage Rebate, Yield Reduction, and Penalty in Lieu of Arbitrage Rebate  
Section references are to the Internal Revenue  
Code unless otherwise noted.  
2. Yield reduction payments.  
3. The penalty:  
Note. Regulations section 1.148-3(b)  
provides that as of any date, the rebate  
amount for an issue is the excess of the  
future value, as of that date, of all receipts  
on nonpurpose investments over the  
future value, as of that date, of all  
In lieu of arbitrage rebate; or  
Future Developments  
To terminate the election to pay a  
penalty in lieu of arbitrage rebate.  
For the latest information about  
developments related to Form 8038-T and  
its instructions, such as legislation  
enacted after they were published, go to  
payments on nonpurpose investments.  
The definitions of payments and receipts  
in Regulations section 1.148-3(d), in part,  
require inclusion of transactions  
4. Penalties and interest on the failure to  
pay on time any amounts in 1-3  
above.  
Issuers of QZABs issued under section  
1397E or section 54E, as applicable, that  
establish a defeasance escrow under the  
Regulations must file Form 8038-T to pay  
100% of the investment earnings on  
amounts in the defeasance escrow.  
(including, but not limited to, acquisition,  
earnings, and return of principal) on a date  
for each nonpurpose investment. Any  
cash flow representation to the contrary  
may result in the understatement of rebate  
amount. Yield reduction payments are  
determined using payments and receipts  
as described in Regulations section  
1.148-5(b)(1).  
General Instructions  
Purpose of Form  
Under section 148(f), interest on a state or  
local bond is not tax-exempt unless the  
issuer of the bond rebates to the United  
States arbitrage profits earned from  
investing proceeds of the bond in higher  
yielding nonpurpose investments. Issuers  
of tax-exempt bonds and any other bonds  
subject to the provisions of section 148  
must use this form to make arbitrage  
rebate and related payments.  
Applicable Regulations  
General  
Unless otherwise stated, regulation  
sections referenced in these instructions  
are to the 1993 regulations, as amended.  
Generally, an issuer may apply these  
regulations to bonds that are outstanding  
on July 8, 1997. For the 1993 regulations,  
see T.D. 8476, 1993-2 C.B. 13, and T.D.  
8538, 1994-1 C.B. 26. For the 1997  
amendments to the 1993 regulations, see  
T.D. 8718, 1997-1 C.B. 47. The 1992  
regulations generally apply to bonds  
issued before July 1, 1993. For the 1992  
regulations, see T.D. 8418, 1992-1 C.B.  
29.  
Exceptions  
A number of exceptions may relieve an  
issuer of the rebate requirement for all or a  
part of an issue of bonds.  
Mortgage revenue bonds. Section  
143(g)(3) provides special arbitrage  
rebate rules for qualified mortgage bonds  
and qualified veterans' mortgage bonds.  
Under these special rules, issuers may  
pay the rebate either to mortgagors, or if  
an election is made before issuance of the  
bond, to the United States. Use this form  
only if you have elected to pay the rebate  
to the United States.  
Note. The following exceptions may  
apply only to a portion of an issue. In such  
cases, the rebate requirement continues  
to apply to the portion of the issue not  
covered by the exception.  
Small issuer exception. The rebate  
requirement does not apply to certain  
bonds issued by governmental units  
issuing no more than $5 million of bonds in  
a calendar year.  
The exception is modified as follows: a  
governmental unit may issue up to $10  
million in bonds after 1997 ($15 million  
after 2001) per calendar year, provided no  
more than $5 million of proceeds are used  
to finance expenditures other than public  
school capital expenditures. See section  
148(f)(4)(D) and Regulations section  
1.148-8.  
Special Rules  
Qualified Zone Academy Bonds  
(QZABs) issued under section 1397E.  
A QZAB is a bond issued by a state or  
local government to finance certain  
eligible public school purposes. An issuer  
of QZABs issued under section 1397E or  
section 54E, if applicable, may establish a  
defeasance escrow to cure a failure to  
properly use QZAB proceeds. An issuer  
must pay any investment earnings on  
amounts in the defeasance escrow that  
are in excess of the yield on the issue. In  
determining the yield on the issue, the  
credit allowed is disregarded. Use this  
form to make payments of investment  
earnings on amounts in defeasance  
escrows. See Regulations section  
For rules on computing the arbitrage  
rebate for mortgage revenue bonds, see  
Temporary Regulations section  
6a.103A-2(i)(4).  
For rules on computing the arbitrage  
rebate for bonds subject to section 103(c)  
(6)(D) of the 1954 Code, see Temporary  
Regulations section 1.103-15AT, T.D.  
8005, 1985-1 C.B. 39, if the issuer has not  
applied the later regulations.  
6-month exception. The rebate  
requirement is considered to be met for  
gross proceeds of an issue (as defined in  
Regulations section 1.148-7(c)(3)) if those  
gross proceeds are spent within 6 months  
of the issue date. The 6-month exception  
is the only exception available for  
refunding issues.  
For QZABs issued under section  
1397E and section 54E, see Regulations  
T.D. 9495.  
Arbitrage Rebate  
Computation of Arbitrage Rebate  
1.1397E-1(h)(8)(ii)(C).  
Note. Use a separate Form 8038-T for  
See section 148(f)(4)(B) and  
The rebate amount for an issue is based  
on the difference between the amount  
actually earned on nonpurpose  
each issue.  
Regulations section 1.148-7(a)–(c).  
Who Must File  
18-month exception. The rebate  
requirement is considered to be met for  
gross proceeds of an issue if those gross  
proceeds are spent according to an  
investments and the amount that would  
have been earned if those investments  
had a yield equal to the yield on the issue.  
Issuers of tax-exempt bonds and any  
other bonds subject to the provisions of  
section 148 must file Form 8038-T to pay:  
1. Arbitrage rebate.  
Oct 06, 2021  
Cat. No. 30066E  
18-month expenditure schedule measured Agreement Program for Tax-Exempt  
QZABs. The issuer must pay 100% of the  
investment earnings on amounts in a  
defeasance escrow established for an  
issue of QZABs under section 1397E or  
section 54E, as applicable, at the same  
time and in the same manner as arbitrage  
rebate payments.  
from the issue date.  
Bonds and Tax Credit Bonds.  
See Regulations section 1.148-7(a),  
Where To File  
(b), and (d).  
File Form 8038-T and any attachments at  
the following address.  
2-year exception. The “available  
construction proceeds” of a construction  
issue are treated as meeting the rebate  
requirement if those proceeds are spent in  
accordance with a 2-year expenditure  
schedule measured from the issue date.  
Department of the Treasury  
Internal Revenue Service Center  
Ogden, UT 84201–0027  
Failure To Pay Timely  
In general, a failure to pay the required  
amounts of arbitrage rebate, yield  
reduction, or penalty payments on time  
may cause bonds to be treated as not  
being, and as never having been,  
tax-exempt.  
See section 148(f)(4)(C) and  
Regulations section 1.148-7(a), (b), and  
(e)–(j).  
Private delivery services. You can use  
certain private delivery services (PDS)  
designated by the IRS to meet the “timely  
mailing as timely filing/paying” rule for tax  
returns and payments. Go to IRS.gov/PDS  
for the current list of designated services.  
Exception for certain investments. The  
rebate requirement generally does not  
apply to gross proceeds that are invested  
in certain tax-exempt bonds, certain  
tax-exempt mutual funds, or certain  
demand deposit securities purchased  
directly from the United States Treasury.  
If the failure is not due to willful neglect,  
the failure will be disregarded if the issuer  
promptly pays a penalty to the United  
States.  
The PDS can tell you how to get written  
proof of the mailing date.  
For the IRS mailing address to use if  
you’re using PDS, go to IRS.gov/  
For governmental and qualified 501(c)  
(3) bonds, the penalty equals 50% of the  
rebate amount not paid when required to  
be paid, plus interest on that amount.  
Otherwise, the penalty equals 100% of the  
rebate amount not paid when required to  
be paid, plus interest on that amount.  
Penalty in Lieu of Arbitrage  
Rebate  
PDS can’t deliver items to P.O.  
boxes. You must use the U.S.  
!
Penalty. An issuer may elect to pay a  
penalty in lieu of rebating arbitrage for the  
available construction proceeds of an  
issue if the spending requirements of the  
2-year exception are not satisfied. The  
penalty is equal to 11/2% of the amount of  
the available construction proceeds that  
do not meet the spending requirements.  
CAUTION  
Postal Service to mail any item to  
an IRS P.O. box address.  
The penalty is generally waived if the  
rebate amount plus interest is paid within  
180 days of discovery of the failure. See  
Regulations section 1.148-3(h) and Rev.  
Proc. 2005-40, 2005-2 C.B. 83.  
When To File  
Arbitrage rebate. An issuer must pay  
rebate in installments for computation  
dates that occur at least once every 5  
years. Rebate payments are due within 60  
days after each computation date. The  
final rebate payment for an issue is due  
within 60 days after the issue is  
See section 148(f)(4)(C)(vii) and  
For issues to which the 1992  
Regulations section 1.148-7(k).  
Regulations apply, see 1992 Regulations  
section 1.148-1(c) for rules relating to  
innocent failure, willful neglect,  
Election to terminate 11/2% penalty. An  
issuer may terminate the election to pay  
penalty in lieu of arbitrage rebate by  
paying an amount equal to 3% of the  
unspent available construction proceeds  
multiplied by the number of years in the  
initial temporary period. The termination  
election also requires other actions, such  
as yield restricting the unspent proceeds  
and using such proceeds to redeem  
bonds.  
discharged.  
computation of the correction amount, and  
penalty and interest. In general, these  
rules also apply to the Penalty in Lieu of  
Arbitrage Rebate and the Termination  
Penalty. See 1992 Regulations section  
1.148-6(n)(4).  
See Regulations section 1.148-3(e)  
through (g).  
Special rules. For an issue retired  
within 3 years of issuance, the final rebate  
payment need not occur before the end of  
8 months after the issue date or during the  
period the issuer expects to meet any of  
the spending exceptions under  
Recovery of Overpayment  
In general, an issuer may recover an  
overpayment for an issue of tax-exempt  
bonds by establishing to the IRS that an  
overpayment occurred. Payments that  
may be recovered include:  
Regulations section 1.148-7.  
See Code section 148(f)(4)(C)(viii) and  
(ix) and Regulations section 1.148-7(l).  
For rules concerning qualified  
mortgage bonds and qualified veterans'  
mortgage bonds see section 143(g)(3).  
Yield Reduction Payments  
Arbitrage rebate,  
Bond proceeds may be invested in higher  
yielding investments only during a  
temporary period described in Regulations  
section 1.148-2(e). After expiration of an  
applicable temporary period, proceeds  
must be yield restricted.  
Yield reduction,  
Penalty in lieu of arbitrage rebate and  
termination penalty. Penalty in lieu of  
arbitrage rebate payments must be paid  
within 90 days of the end of the applicable  
spending period.  
Penalty in lieu of arbitrage rebate, and  
Penalty to terminate penalty in lieu of  
arbitrage rebate.  
See Regulations section 1.148-3(i) and  
Payment of the 3% penalty to terminate Form 8038-R, Request for Recovery of  
One method of complying with the yield  
restriction requirement is to make “yield  
reduction payments.” For certain  
the penalty in lieu of arbitrage rebate  
election must be made within 90 days of  
(a) the end of the initial temporary period if  
the termination election was made under  
section 148(f)(4)(C)(viii), or (b) the date of  
the termination election if it was made  
under section 148(f)(4)(C)(ix).  
Overpayments Under Arbitrage Rebate  
Provisions.  
investments, a yield reduction payment is  
taken into account in computing the yield  
on that investment. See Regulations  
section 1.148-5(c).  
Specific Instructions  
Part I—Reporting Authority  
Amended return. An issuer may file an  
amended return to change or add to the  
information reported on a previously filed  
return for the same date of issue. If you  
are filing to correct errors or change a  
For investments with excess yield that  
are not eligible for yield reduction  
Yield reduction payments. Yield  
reduction payments are payable at the  
same time as arbitrage rebate payments.  
payments (such as an incorrectly invested  
advance refunding escrow fund), see  
Notice 2008-31, Voluntary Closing  
See Regulations section 1.148-5(c)(2).  
Instructions for Form 8038-T (Rev. 10-2021)  
-2-  
previously filed return, check the  
“Amended Return” box in the heading of  
the form.  
The amended return must provide all  
the information reported on the original  
return, in addition to the new or corrected  
information. Attach an explanation of the  
reason for the amended return.  
filing for this issue. For QZABs issued  
under section 1397E or section 54E, enter  
“qualified zone academy bond—section  
1397E” or “qualified zone academy  
bond—section 54E” and the total issue  
price.  
Part IV— Late Payments  
Line 20. Under the current regulations, in  
order to qualify for a waiver of penalty, a  
failure to pay must not be due to willful  
neglect. Attach an explanation of the  
failure and the basis for concluding that  
the failure is not due to willful neglect. See  
Rev. Proc. 2005-40 for more information.  
Part II—Arbitrage Rebate and  
Yield Reduction Payments  
Line 21. For a failure that does not qualify  
for a waiver of penalty, the failure will be  
disregarded if the issuer pays a penalty to  
the United States. For governmental and  
qualified 501(c)(3) bonds, the penalty  
equals 50% of the rebate amount not paid  
timely plus interest on that amount. For  
other bonds, the penalty is 100% of the  
rebate amount not paid timely plus interest  
on that amount.  
Line 12. Enter the computation date to  
which this payment relates. The first  
rebate installment payment must be made  
for a computation date that is not later  
than 5 years after the issue date.  
Lines 1–10  
General. Enter the same information that  
was entered on the “initial filing” of the  
following forms. Make any necessary  
changes, for example, a change of  
address.  
Subsequent rebate installment payments  
must be made for a computation date that  
is not later than 5 years after the previous  
computation date for which an installment  
payment was made.  
Form 8038, Information Return for  
Tax-Exempt Private Activity Bond  
Issues;  
Form 8038-B, Information Return for  
Build America Bonds and Recovery  
Zone Economic Development Bonds;  
Form 8038-G, Information Return for  
Tax-Exempt Governmental Bonds;  
Form 8038-GC, Information Return for  
Small Tax-Exempt Governmental  
Bond Issues, Leases, and Installment  
Sales; or  
Line 13. Enter the amount of the rebate  
payment. A rebate installment payment  
must be in an amount that, when added to  
the future value, as of the computation  
date, of previous rebate payments made  
for the issue, equals at least 90% of the  
rebate amount as of that date. A final  
rebate payment must be paid in an  
amount that, when added to the future  
value of previous rebate payments made  
for the issue, equals 100% of the rebate  
amount as of that date.  
Note. The calculation for late interest is  
included under line 22 only, not under  
line 21.  
Line 22. Compute interest at the  
underpayment rate under section 6621,  
beginning on the date the correct rebate  
amount is due and ending on the date 10  
days before it is paid.  
For issues to which the 1992  
Regulations apply, see 1992 Regulations  
section 1.148-1(c)(2) for computation of  
the correction amount.  
Form 8038-TC, Information Return for  
Tax Credit Bonds and Specified Tax  
Credit Bonds.  
Line 1. Enter the name of the  
See Regulations section 1.148-3(f).  
governmental entity that issued the bonds,  
not the name of the entity receiving the  
benefit of the financing or the eligible  
taxpayer claiming a tax credit.  
For issues to which the 1992  
Regulations apply, see 1992 Regulations  
section 1.148-1(b)(3).  
Part V—Total Payment  
Line 23. Combine all payment amounts  
on lines 13, 14, 15, 17, 19, 21, and 22.  
Enclose a check or money order for the  
total amount made payable to the “United  
States Treasury.” Include the issuer's  
name, address, EIN, “Form 8038-T,” and  
the date on the check or money order.  
Line 14. For investments covered by the  
special yield reduction rule, rebate and  
yield reduction payments are included in  
the computation of yield for that  
investment.  
Line 4. This line is for IRS use only. Do  
not make an entry.  
Lines 9 and 10. Enter the name, title,  
and telephone number of the officer or  
other employee of the issuer whom the  
IRS may call for more information. If the  
issuer wishes to designate a person other  
than an officer or other employee of the  
issuer (including a legal representative or  
paid preparer) whom the IRS may call for  
more information about this return, enter  
the name, title, and telephone number of  
such person here.  
See Regulations section 1.148-5(c).  
Part VI—Miscellaneous  
Line 15. For QZABs issued under section  
1397E or section 54E, if applicable, enter  
the amount equal to 100% of the  
investment earnings in a QZAB  
defeasance escrow.  
Line 24. Enter the amount of proceeds  
(consisting of sale, investment, and  
transferred proceeds) not allocated to  
expenditures for a governmental purpose  
of the issue.  
Part III—Penalty in Lieu of  
Arbitrage Rebate  
Line 25. Enter the amount of proceeds  
used to pay principal of and call premiums  
on the bonds for which this form is being  
filed.  
Note. By authorizing a person other than  
an authorized officer or other employee of  
the issuer to communicate with the IRS  
and whom the IRS may call for more  
information about this return, the issuer  
authorizes the IRS to communicate  
directly with the individual listed on line 9  
and consents to the disclosure of the  
issuer's return information to that  
individual, as necessary to process this  
return.  
Complete this section only if, on or before  
the issue date of the bonds, an election  
was made under section 148(f)(4)(C)(vii).  
Line 26. Under Regulations section  
1.148-5(e)(2), qualified administrative  
costs are taken into account in  
Line 16. Check the appropriate box for  
the number of months between the issue  
date of the bonds and the end of the  
spending period for which this Form  
8038-T is being filed. For periods greater  
than 24 months, check the box marked  
“Other” and fill in the number of months  
since the date of issue.  
determining payments and receipts on  
nonpurpose investments. Regulations  
section 1.148-5(e)(2)(iii) provides special  
rules for qualified administrative costs for  
guaranteed investment contracts (GICs)  
and yield restricted defeasance escrows.  
Enter the amount of any qualified  
Line 11. Enter the same type of issue that  
was entered on Form 8038, 8038-B,  
administrative costs taken into account in  
computing the rebate amount under these  
special rules.  
Note. File a separate Form 8038-T for  
8038-G, or 8038-TC. For bonds previously  
reported on Form 8038-GC, enter “small  
governmental bond.” Also enter the total  
issue price that was listed on the initial  
each 6-month spending period.  
Lines 17–19. See Penalty in Lieu of  
Arbitrage Rebate, earlier.  
Line 27. Under Regulations section  
1.148-4(f)(1), fees properly allocable to  
Instructions for Form 8038-T (Rev. 10-2021)  
-3-  
payments for a qualified guarantee for an  
issue are treated as additional interest in  
computing the yield on that issue. Enter  
the amount of such fees.  
Signature and Consent  
Paperwork Reduction Act Notice. We  
ask for the information on this form to carry  
out the Internal Revenue laws of the  
United States. You are required to give us  
the information. We need it to ensure that  
you are complying with these laws and to  
allow us to collect the right amount of  
arbitrage rebate, yield reduction  
An authorized representative of the issuer  
must sign and date Form 8038-T and any  
applicable certification. Also print the  
name and title of the person signing Form  
8038-T. The authorized representative of  
the issuer signing this form must have the  
authority to consent to the disclosure of  
the issuer's return information, as  
Line 28. Enter “Yes” if the issue is a  
variable rate issue. A variable rate issue is  
an issue that contains a bond that has a  
yield that is not fixed and determinable on  
the issue date.  
payments, and penalties.  
necessary to process this return, to the  
person(s) that has been designated in  
Form 8038-T.  
Line 29. Enter “Yes” if the issuer entered  
into a qualified hedge. In general,  
payments made or received by an issuer  
under a qualified hedge are taken into  
account to determine the yield on the  
issue. A hedge may be entered into  
before, at the same time as, or after the  
date of issue. See Regulations section  
1.148-4(h)(1). Enter the name of the  
provider of the hedge and term of the  
hedge to the nearest tenth of a year (for  
example, 2.4 years). Attach additional  
sheets if necessary.  
You are not required to provide the  
information requested on a form that is  
subject to the Paperwork Reduction Act  
unless the form displays a valid OMB  
control number. Books or records relating  
to a form or its instructions must be  
retained as long as their contents may  
become material in the administration of  
any Internal Revenue law. Generally, tax  
returns and return information are  
Note. If authority is granted in Part I, lines  
9 and 10, for the IRS to communicate with  
a person other than an officer or other  
employee of the issuer, by signing this  
form, the issuer's authorized  
representative consents to the disclosure  
of the issuer's return information, as  
necessary to process this return, to such  
person.  
confidential, as required by section 6103.  
The time needed to complete and file  
this form will vary depending on individual  
circumstances. The estimated burden for  
tax-exempt organizations filing this form is  
approved under OMB control number  
1545-0047 and is included in the  
Paid Preparer  
Line 30. Enter “Yes” if any gross  
If an authorized officer of the issuer filled in  
this return, the paid preparer's space  
should remain blank. Anyone who  
prepares the return but does not charge  
the organization should not sign the  
return. Certain others who prepare the  
return should not sign. For example, a  
regular, full-time employee of the issuer,  
such as a clerk, secretary, etc., should not  
sign.  
proceeds of the issue were invested in a  
guaranteed investment contract (GIC). A  
GIC includes any nonpurpose investment  
that has specifically negotiated withdrawal  
or reinvestment provisions and a  
estimates shown in the instructions for  
their information return.  
specifically negotiated interest rate, and  
also includes any agreement to supply  
investments on two or more dates (for  
example, a forward supply contract). See  
Regulations section 1.148-1(b). Enter the  
name of the provider of the GIC and term  
of the GIC to the nearest tenth of a year.  
Attach additional sheets if necessary.  
If you have suggestions for making this  
form simpler, we would be happy to hear  
from you. You can send us comments  
through IRS.gov/FormComments. Or you  
can write to:  
Generally, anyone who is paid to  
prepare a return must sign it and fill in the  
other blanks in the Paid Preparer Use Only  
area of the return.  
Internal Revenue Service  
Tax Forms and Publications  
1111 Constitution Ave. NW, IR-6526  
Washington, DC 20224  
Line 31. Enter “Yes” if any gross  
proceeds were invested beyond the  
temporary periods set forth in Regulations  
section 1.148-2(e) or 1.148-9(d).  
The paid preparer must:  
Sign the return in the space provided  
for the preparer's signature (a  
Do not send Form 8038-T to this address.  
Instead, see Where To File, earlier.  
Line 32. Indicate who prepared the  
calculations necessary for the filing of this  
form. If other than the issuer, indicate the  
name of the entity or the individual  
preparing the calculations.  
facsimile signature is acceptable),  
Enter the preparer information, and  
Give a copy of the return to the issuer.  
Instructions for Form 8038-T (Rev. 10-2021)  
-4-