SECTION 1. PURPOSE

This notice modifies Notice 2008–88, 2008–42 I.R.B. 933 (October 20, 2008), to extend the expiration dates from December 31, 2009 to December 31, 2010

of certain temporary rules allowing state and local governmental issuers to purchase and hold their own tax-exempt bonds under special reissuance standards for tax-exempt bonds. The intent of the extensions of these temporary rules is to facilitate liquidity and stability in the tax-exempt bond market in recognition of some continuing credit enhancement and liquidity constraints in this market.

Notice 2008–88 amended and supplemented Notice 2008–41, 2008–15 I.R.B. 742 (April 14, 2008), regarding reissuance standards for tax-exempt bonds to expand the circumstances and time periods during which the Treasury Department and the Internal Revenue Service (“IRS”) would treat a tax-exempt bond that is purchased by its state or local governmental issuer as continuing in effect without resulting in a reissuance or retirement of the purchased bond solely for purposes of § 103 and §§ 141 through 150 of the Internal Revenue Code, as amended (“Code”). (Except as noted, section references in this notice are to the Code and the Income Tax Regulations). Defined terms in Notice 2008–41 and Notice 2008–88 shall have the same meanings when used in this notice.