October 21, 2019

October 21, 2019

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IRS Clarifies New Management Contract Safe Harbors

In August, 2016, the IRS issued Revenue Procedure 2016-44, the first comprehensive revision of its management contract safe harbors since Revenue Procedure 97-13.  Rev. Proc. 2016-44 built upon and amplified principles laid out in private letter rulings issued over many years and in Notice 2014-67.  Now, less than six months later, the IRS has published Revenue Procedure 2017-13, which clarifies and supersedes Rev. Proc. 2016-44 but does not materially change the safe harbors described therein.  The clarifications are in response to questions received with respect to certain types of compensation protected under earlier safe harbors, incentive compensation, timing of payments, treatment of land when determining useful life, and approval of rates.

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About this Author

Christie L. Martin, Mintz Levin, Tax Revenue lawyer, Government Agency Attorney
Member

Christie counsels government entities and 501(c)(3) organizations as well as investment bankers and banks in connection with the tax-exempt financing of projects for public and nonprofit organizations. Her practice focuses on municipal finance–related federal tax law relevant to the issuance of general obligation bonds, qualified 501(c)(3) private activity bonds, exempt facility bonds, tax revenue anticipation, and other working capital bonds and tax credit bonds.

Christie often acts as counsel to issuers and borrowers in connection with IRS...

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