IRS issues new safe harbor provisions for management contracts
The Internal Revenue Service has announced a new safe harbor for management contracts relating to certain bond-financed facilities. Rev. Proc. 2016-44 aims to provide what it characterizes as a “more flexible and less formulaic approach” to the question of whether an arrangement with a service provider could adversely affect the tax-exempt status of governmental bonds and qualified 501(c)(3) bonds under the Internal Revenue Code of 1986, as amended. The new safe harbor permits longer term arrangements between the beneficiaries of tax exempt bonds and service providers without adversely affecting the tax status of those bonds. For more, read the full article.
