On June 26, 2007, the Internal Revenue Service provided clarification as to the circumstances in which the sponsorship of research activities conducted in a tax-exempt bond-financed facility will or will not be treated as creating "private use" of the facility by the research sponsor. Revenue Procedure 2007-47 modifies and supersedes Revenue Procedure 97-14, a prior safe harbor. These changes affect determinations of private use with respect to both governmental and qualified 501(c)(3) bonds. The new provisions may be applied to existing research contracts on an elective basis.

This Mintz Levin Advisory reviews the prior safe harbor, the effects of the changes on federally sponsored and industry sponsored research and concludes with a few of several questions that still remain.