TEB - Resolution Amount

Generally, a closing agreement resolution amount for a tax-exempt bond issue is based on 100% of the present value of the taxpayer exposure of the bond issue, as computed in IRM 4.70.14.2.1.5.9.7, TEB – Computation of Taxpayer Exposure, below. However, as appropriate, you can also base closing agreement resolution amounts on:

The present value of an alternative minimum tax adjustment.

IRC 150(b) adjustments.

IRC 168(g) adjustments.

Any excessive arbitrage profits.

IRC 6700 penalties.

Generally, a closing agreement resolution amount for a tax credit bond issue or direct pay bond issue is based on 100% of the credit maintenance amount, as computed in IRM 4.70.14.2.1.5.9.8, TEB – Computation of Credit Maintenance Amount, below. For direct pay bonds, an issuer and TEB may agree to modify the amount of future allowable credit payments the issuer may claim by excluding a portion of interest payments on those bonds from the calculations of the credits, as appropriate under the facts and circumstances.

In certain exam cases, the closing agreement resolution amount may be based on a specified amount. Generally, a specified amount is only appropriate when described in a closing agreement program in the IRM, published guidance (including Notices and Announcements) and IRM 4.70.14.2.1.5.9.9, TEB – Resolutions Involving Specified Amounts.

A resolution amount may consist of one or more amounts described in or computed under IRM 4.70.14.2.1.5.9.7 through IRM 4.70.14.2.1.5.9.15, including but not limited to an amount representing taxpayer exposure, a credit maintenance amount and/or a specified amount. The IRS requires a minimum amount even if the computations in IRM 4.70.14.2.1.5.9.7 through IRM 4.70.14.2.1.5.9.14 produce a lower amount. For an examination-related closing agreement, the minimum resolution amount is $5,000 per bond issue.