IRS Withholds Bond Subsidy from Austin


The city of Austin, Texas had to transfer funds into an account to make payments on Build America Bonds that were sold last year as the IRS withheld a subsidy amounting to $617,284.

The reason for the retention of the subsidy by the IRS was the state capital’s failure to pay its dues on payroll taxes according to a letter to the city treasurer, Art Alfaro dated February 15. The subsidy was meant for a debt service payment due March 1. Hence, Alfaro utilized reserve funds and transferred it into an account to make the payments on time.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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