rp-02-48.pdf

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Rev. Proc. 2002-48, 2002-37 I.R.B ____(Rev. Proc. 88-10 , revised)

SECTION 1. PURPOSE

This revenue procedure provides guidance to issuers of state or local
bonds for requesting an extension of time to file, or for amending, the statement
of information required by section 149(e) of the Internal Revenue Code. In
general, these statements must be filed on Forms 8038, 8038-G, or 8038-GC.
SECTION 2. BACKGROUND
01. The Tax Reform Act of 1986, 1986-3 (Vol. 1) C.B. 1, 567, amended and
reorganized the sections of the 1954 Code pertaining to information reporting for
certain state or local bonds. Former section 103(l), pertaining to information
reporting for private purpose bonds, and former section 103A(j)(3)(A), pertaining
to information reporting for qualified mortgage bonds, were consolidated in
section 149(e) of the 1986 Code, which requires information reporting for any
state or local bond.
02. Section 103(a) of the 1986 Code provides that, with certain exceptions, gross
income does not include interest on any state or local bond.
03. Rev. Proc. 88-10, 1988-1 C.B. 635, provided guidance to issuers of state or
local bonds for requesting an extension of time to file the statement of
information required by section 149(e) of the 1986 Code.

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04. Section 149(e)(1) of the 1986 Code provides that interest on a state or local
bond will not be excludable from gross income unless certain information
reporting requirements are satisfied. The issuer must submit a statement that
contains the information required under section 149(e)(2). The statement must
be submitted not later than the 15
th
day of the 2
nd
calendar month after the close
of the calendar quarter in which the bond is issued (or such later time as the
Secretary may prescribe with respect to any portion of the statement).
05. In general, the statement required by section 149(e)(2) of the 1986 Code
must be filed on one of the following forms: Form 8038, Information Return for
Tax-Exempt Private Activity Bond Issues; Form 8038-G, Information Return for
Tax-Exempt Governmental Obligations; or Form 8038-GC, Information Return for
Small Tax-Exempt Governmental Bond Issues, Leases, and Installment Sales.
06. Section 1.149(e)-1(d)(2)(ii) of the Income Tax Regulations provides that the
Commissioner may grant an extension of time to file any form or attachment
required under section 149(e) if the Commissioner determines that the failure to
file in a timely manner was not due to willful neglect. The Commissioner may
make this determination with respect to an issue or a class of issues.
SECTION 3. PROCEDURES
01. An issuer of a state or local bond who fails to timely submit the statement
(Form 8038, 8038-G, or 8038-GC) required by section 149(e)(2) should take the
following action as promptly as is reasonably practical after discovery of the
failure.

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(1) Mail the statement to the Internal Revenue Service, Ogden
Submission Processing Center, Ogden, UT 84201. The words,
“Request for Relief under Section 3 of Rev. Proc. 2002-__” should
be typed or printed across the top of the statement.
(2) Attach the statement to a letter briefly setting forth the reasons why
the statement was not timely submitted to the Service. The letter
must be signed by an individual who has knowledge of the relevant
facts and circumstances. The letter should include all relevant
information, including when the applicable statement (Form 8038,
8038-G, or 8038-GC) was required to be filed, and a description of
the events that led up to both the failure to timely file and discovery
of the failure to timely file. The letter should also indicate whether
the bond issue in question is under examination by the Service. An
issue generally is under examination on the date a letter opening
an examination of the issue is sent.
02. A request for an extension filed in accordance with section 3.01 shall be
deemed accepted if the Service does not notify the issuer regarding the
request within 90 days after the Service’s receipt of the request.
03. The Service will notify the issuer in writing if it is unable to make a
determination, based on the issuer’s request for an extension, that the
failure to file the statement was not due to willful neglect. The notification
will be made within 90 days of the Service’s receipt of the issuer’s request
and will inform the issuer that the Service has been unable to make the

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determination. In the notification, the Service may request additional
information from the issuer.
04. If, after the notification under section 3.03, and based on the information
submitted, the Service determines that the failure to file the statement was
not due to willful neglect, it will so inform the issuer in writing.
05. If, after the notification under section 3.03, and based on the information
submitted, it appears that a determination adverse to the issuer will be
made, the issuer will be entitled, upon request, to a conference with the
Service. If the issuer requests a conference, no adverse determination
(whether preliminary or otherwise) will be made prior to the conference. If,
after the conference, the Service determines that the failure to file the
statement was not due to willful neglect, it will so inform the issuer in
writing.
06. If the Service determines that the failure to timely file the statement is not
due to willful neglect, then the filing of the statement in section 3.01 above
is accepted, and the information reporting requirement of section 149(e)(1)
is deemed satisfied.
07. If the Service determines that the failure to timely file the statement is due
to willful neglect, the Service will issue a preliminary adverse
determination to the issuer that the interest on the bond is not excludable
from gross income under section 103(a). In such circumstances, the
procedures set forth in Rev. Proc. 99-35, 1999-41 I.R.B. 501 (procedures

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for administrative appeal of proposed adverse determination of tax-exempt
status of the bond issue), or its successor shall be followed.
SECTION 4. AMENDMENT TO STATEMENT FILED ON FORM 8038, 8038-G
OR 8038-GC.
If, after timely filing the statement required under section 149(e)(2), an
issuer discovers that there is an inaccuracy in the statement, the issuer may file
an amended statement.
SECTION 5. EFFECT ON OTHER DOCUMENTS
Rev. Proc. 88-10 is superseded.
SECTION 6. EFFECTIVE DATE
This revenue procedure is effective immediately.
DRAFTING INFORMATION
The principal author of this revenue procedure is Susan D. Ruth of Tax
Exempt Bonds, Outreach Planning and Review, Tax Exempt/Government
Entities (TE/GE). For further information regarding this revenue procedure,
contact Ms. Ruth on (202) 283-9792 (not a toll-free call).