rp-05-30.pdf

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Part III

Administrative, Procedural and Miscellaneous

26 C.F.R. 601.601 Rules and regulations.
(Also Part I, §§ 146; 1.103(n)-4T; 301.9100-1; 301.9100-3.)

Rev. Proc. 2005-30

SECTION 1. PURPOSE
This revenue procedure provides that an issuing authority
that fails to make a timely carryforward election of unused
private activity bond volume cap under § 146(f) of the Internal
Revenue Code (the “Code”) is granted under § 301.9100-3 of the
Procedure and Administration Regulations an automatic extension
of six months from the due date of the carryforward election, to
make the carryforward election, provided that the issuing
authority meets the requirements of § 4 of this revenue
procedure.
SECTION 2. LAW AND ANALYSIS
.01 Under § 103(a), except as provided in § 103(b), gross
income does not include interest on any State or local bond.
Section 103(b) provides, in part, that § 103(a) shall not apply
to any private activity bond that is not a qualified bond (within

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the meaning of § 141). Section 141(e) provides, in part, that a
qualified bond must meet the applicable requirements of § 146.
.02 Section 146(a) provides that a private activity bond
issued as part of an issue meets the requirements of § 146 if the
aggregate face amount of the private activity bonds issued
pursuant to such issue, when added to the aggregate face amount
of tax-exempt private activity bonds previously issued by the
issuing authority during the calendar year, does not exceed such
authority=s volume cap for such calendar year.
.03 Section 146(f)(1) provides that if an issuing
authority=s volume cap for any calendar year after 1985 exceeds
the aggregate amount of tax-exempt private activity bonds the
authority issued during such calendar year, such issuing
authority may elect to treat all (or any portion) of such excess
as a carryforward.
.04 Section 1.103(n)-4T, A-2, of the temporary Income Tax
Regulations provides, in part, that an election to carry forward
volume cap must be filed prior to the end of the calendar year
with respect to which the issuing authority has the unused volume
cap. These regulations, which were issued under the predecessor
to § 146, generally continue to apply to the extent that they are
not inconsistent with the Tax Reform Act of 1986. See Conf. Rep.
99-841 at II-686, 1986-3 (Vol. 4) C.B. 686. However, Notice 89-
12, 1989-1 C.B. 633, which may be relied upon, provides that

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regulations to be issued under § 146 will require that the
issuing authority file the carryforward election by the earlier
of (1) February 15 of the calendar year following the year in
which the excess amount arises, or (2) the date of issue of bonds
issued pursuant to the carryforward election.
.05 Announcement 87-43, 1987-19 I.R.B. 15, provides that
Form 8328 (Carryforward Election of Unused Private Activity Bond
Volume Cap) should be used by issuers of tax-exempt bonds who
wish to make a carryforward election under § 146(f).
.06 Sections 301.9100-1 through 301.9100-3 provide the
standards the Commissioner will use to determine whether to grant
an extension of time to make a regulatory election (defined in
§ 301.9100-1(b) to include an election whose due date is
prescribed by a regulation or notice). Section 301.9100-1(a)
provides that an extension of time is available for elections
that a taxpayer is otherwise eligible to make. However, the
granting of an extension of time is not a determination that the
taxpayer is otherwise eligible to make the election.
.07 Section 301.9100-3(a) generally provides, in part, that
requests for relief subject to § 301.9100-3 will be granted when
the taxpayer provides the evidence to establish to the
satisfaction of the Commissioner that the taxpayer acted
reasonably and in good faith, and the grant of relief will not
prejudice the interests of the Federal Government.

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.08 Section 301.9100-3(b)(1) provides, in part, that
generally a taxpayer is deemed to have acted reasonably and in
good faith if the taxpayer requests relief under § 301.9100-3
before the failure to make the regulatory election is discovered
by the Internal Revenue Service (the “IRS”).
.09 Section 301.9100-3(b)(3) provides, in part, that for
purposes of § 301.9100-3(b), a taxpayer is deemed to have not
acted reasonably and in good faith if the taxpayer (1) was
informed in all material respects of the required election and
related tax consequences, but chose not to file the election, or
(2) uses hindsight in requesting relief. If specific facts have
changed since the due date for making the election that make the
election advantageous to a taxpayer, the IRS will not ordinarily
grant relief. In such a case, the IRS will grant relief only
when the taxpayer provides strong proof that the taxpayer's
decision to seek relief did not involve hindsight.
.10 Section 301.9100-3(c) provides, in part, that the
interests of the Federal Government are prejudiced if granting
relief would result in a taxpayer having a lower tax liability in
the aggregate for all taxable years affected by the election than
the taxpayer would have had if the election had been timely made
(taking into account the time value of money). Similarly, if the
tax consequences of more than one taxpayer are affected by the
election, the Federal Government’s interests are prejudiced if

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extending the time for making the election may result in the
affected taxpayers, in the aggregate, having a lower tax
liability than if the election had been timely made.
.11 The granting of an extension of time to file a Form 8328
under this revenue procedure will not prejudice the interests of
the Federal Government.
SECTION 3. DESCRIPTION OF RELIEF
.01 An issuing authority that fails to make a timely
carryforward election is granted under this revenue procedure an
automatic extension of six months from the due date of the
carryforward election (excluding extensions), to make the
carryforward election, if that issuing authority meets the
requirements of § 4 of this revenue procedure.
.02 The granting of an extension of time to make a
carryforward election under this revenue procedure is not a
determination that the issuing authority is otherwise eligible to
make the election.
.03 If an issuing authority is not eligible for relief under
this revenue procedure, such authority may request relief by
applying for a letter ruling under § 301.9100-3, Rev. Proc. 2005-
1, 2005-1 I.R.B. 1 (or its successor), and Rev. Proc. 96-16,
1996-1 C.B. 630.
SECTION 4. PROCEDURE
.01 An issuing authority is eligible for relief under this

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revenue procedure if it meets the following requirements--
(1) The issuing authority must file a Form 8328 within
six months after the due date of the carryforward election
(excluding extensions);
(2) The Form 8328 filed under this revenue procedure
must have typed or printed on the top “FILED PURSUANT TO REV.
PROC. 2005-30”;
(3) The issuing authority must file the Form 8328 under
this revenue procedure before it receives written notice from the
IRS that it failed to make the carryforward election timely;
(4) The issuing authority must not have declined to
make the carryforward election, after having been informed in all
material respects of the required election and related tax
consequences, on or before the due date for filing the election,
and then have reversed that decision after the due date for
filing the election;
(5) The issuing authority must not be filing the
carryforward election in reaction to specific facts or
circumstances that changed since the due date for making the
carryforward election so as to make the filing of a carryforward
election advantageous to the issuing authority; and
(6) The issuing authority must satisfy all of the
requirements for making the carryforward election (other than the
requirement to make the election timely).

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.02 For carryforward elections made under this revenue
procedure, by signing the Form 8328, the issuing authority is
certifying that it has met all of the requirements in § 4.01 of
this revenue procedure.
.03 This procedure is in lieu of the letter ruling procedure
under § 301.9100-3 that is used to obtain relief for a failure to
make a carryforward election timely. Accordingly, an issuing
authority is not required to pay a user fee in order to benefit
from the relief provided by this revenue procedure.
.04 A Form 8328 filed under this revenue procedure should be
sent to the Internal Revenue Service Center, Ogden, Utah, 84201.
SECTION 5. EFFECT ON OTHER DOCUMENTS
Except as expressly provided in this revenue procedure, this
revenue procedure has no effect on the application of any other
document.
SECTION 6. EFFECTIVE DATE
This revenue procedure is effective as of May 11, 2005.
SECTION 7. DRAFTING INFORMATION
The principal author of this revenue procedure is Zoran
Stojanovic of the Office of Assistant Chief Counsel (Exempt
Organizations/Employment Tax/Government Entities). For further
information regarding this revenue procedure contact
Mr. Stojanovic at (202) 622-3980 (not a toll-free call).