SECTION 5. INFORMATION

REPORTING FOR BUILD AMERICA BONDS

5.1 Build America Bonds (Tax Credit) .

Subject to updated IRS information reporting forms or procedures, an issuer of Build America Bonds (Tax Credit) must report the issuance of the bonds on IRS Form 8038–G, Information Return for Tax-Exempt Governmental Obliga- tions . Issuers of these bonds with an issue price of less than $100,000 should file a Form 8038–G in accordance with the instructions contained in this notice instead of filing an IRS Form 8038–GC, Information Return for Small Tax-Exempt Governmental Bond Issues, Leases, and Installment Sales . Issuers should check Line 18, “Other”, on the form and insert “Build America Bond (tax credit)” on the line provided. Issuers must attach a separate schedule that indicates the type of bond issue that would normally be entered on Lines 11 to 18, i.e., education, health and hospital, transportation, public safety, environment (including sewage bonds), housing, utilities or other (with description for “other” category).

5.2 Build America Bonds (Direct Payment) and Recovery Zone Economic Development Bonds (Direct Payment) .

Subject to updated IRS information reporting forms or procedures, an issuer of

Build America Bonds (Direct Payment) or Recovery Zone Economic Development Bonds (Direct Payment) must report the issuance of the bonds on IRS Form 8038–G, Information Return for Tax-Exempt Gov- ernmental Obligations . The Form 8038–G with respect to an issue must be filed with the IRS at least 30 days before the first Form 8038–CP is filed to request payment with respect to an interest payment date for that issue, except that, for bonds issued before July 1, 2009 only, such Form 8038–G may be filed less than 30 days before the filing of the first Form 8038–CP provided the form 8038–G is filed separately from and prior to the filing of Form 8038–CP. Issuers should not attach a Form 8038–G to a Form 8038–CP. Issuers of these bonds with an issue price of less than $100,000 should file a Form 8038–G in accordance with the instructions contained in this notice instead of filing a Form 8038–GC, Informa- tion Return for Small Tax-Exempt Govern- mental Bond Issues, Leases, and Install- ment Sales .

An issuer of Build America Bonds (Direct Payment) must check Line 18, “Other”, on the form and insert “Build America Bond (payment option)” on the line provided. An issuer of Recovery Zone Economic Development Bonds (Direct Payment) must check Line 18, “Other”, on the form and insert “Recovery Zone Economic Development Bond (payment option)” on the line provided. Issuers must attach a separate schedule that indicates the type of bond issue that would normally be entered on Lines 11 to 18, i.e., education, health and hospital, transportation, public safety, environment (including sewage bonds), housing, utilities or other (with description for “other” category).

In addition, issuers of these bonds must attach a schedule to the Form 8038–G which contains the information described below for the bond issue.

(1) For fixed-rate bonds, attach a complete debt service schedule, titled “Fixed Rate Bond - Debt Service Schedule,” that provides a list of each interest payment date, the total interest payable on such date, the total principal amount of bonds expected to be outstanding on such date, the credit payment expected to be requested from the IRS on such date, and the earliest date that bonds can be called.

2009–16 I.R.B. 837 April 20, 2009

amount of the premium. The employer (or, in certain circumstances, the multiemployer health plan or the insurer) is reimbursed for the other 65 percent of the premium that is not paid by the assistance eligible individual through a credit against its payroll taxes.

The premium reduction applies as of the first period of coverage beginning on or after February 17, 2009 (the date of enactment of ARRA). An assistance eligible individual is eligible for the premium reduction for up to nine months from the first month the premium reduction provisions of section 3001 of ARRA apply to the individual. The premium reduction period ends if the individual becomes eligible for coverage under any other group health plan ¹ or for Medicare benefits.

The premium reduction does not extend beyond the period of COBRA continuation coverage. An individual receiving the premium reduction who becomes eligible for coverage under any other group health plan or Medicare is required to notify the group health plan of eligibility for that other coverage. If the individual fails to notify the group health plan, the individual is subject to a tax penalty of 110 percent of the premium reduction improperly received after eligibility for the other coverage.

Under ARRA, an employer may allow an assistance eligible individual to elect coverage different from the coverage under the plan in which such individual was enrolled prior to the involuntary termination, and the premium reduction will apply with respect to such different coverage. (This does not change the basic requirement under Federal COBRA that a group health plan must allow a qualified beneficiary to elect to continue the coverage in which the individual is enrolled as of the qualifying event.) If offered, the assistance eligible individual has 90 days after receiving notice of the option to elect the other coverage. The premium for coverage offered under this option cannot exceed the premium for the coverage the individual had prior to the involuntary termination. In addition, the coverage offered under this option must be coverage offered to active employees and cannot be

ance. This notice applies to Build America Bonds, including Recovery Zone Economic Development Bonds, issued after February 17, 2009.