Texas Arbitrage Rebate and Bond Compliance Services
With Texas issuing billions in tax-exempt bonds each year to fund critical infrastructure and public projects, ensuring arbitrage rebate compliance helps Texas municipalities, school districts, and other issuers avoid costly IRS penalties and maintain financial integrity.
As a premier provider nationally, with over 35 years of experience, Arbitrage Compliance Specialists (ACS) provides our Texas clients with tailored arbitrage rebate services, combining specialized expertise and a dedicated team to ensure efficient, accurate compliance across the state. Trusted by issuers across Texas, ACS provides the clarity and confidence needed to navigate complex arbitrage rules with ease.
Arbitrage Rebate Services in Texas
At ACS, our core arbitrage rebate services in Texas encompass key areas including arbitrage rebate calculations, yield restriction compliance, spending exception calculations, and the preparation and filing of IRS Forms 8038-T and 8038-R.
Arbitrage Rebate & Yield Restriction Calculations
Our expert team performs precise arbitrage rebate calculations to identify and quantify any excess earnings on bond proceeds that must be rebated to the IRS. We also conduct yield restriction calculations to ensure investments do not exceed allowable yields, helping Texas issuers navigate complex federal regulations with confidence.
Spending Exception Calculations
ACS conducts thorough spending exception calculations to determine eligibility for exemptions such as the 6-month, 18-month, or 2-year rules, enabling Texas bond issuers to potentially avoid rebate payments and keep all excess earnings.
Preparation and Filing Form 8038-T & 8038-R
We handle the preparation and filing of IRS Forms 8038-T for rebate payments and 8038-R for recoverable overpayments, ensuring Texas issuers meet all deadlines and documentation requirements for seamless compliance.
Additional Compliance Support for Texas Issuers
Beyond core arbitrage rebate services, ACS provides specialized post-issuance monitoring, bond compliance training, and ongoing consulting to ensure Texas municipalities, school districts, and other bond issuers maintain continuous IRS compliance and stay informed on evolving regulations.
Post-Issuance Monitoring
One of the key challenges in Texas arbitrage rebate compliance is tracking critical compliance dates and maintaining thorough documentation for tax-exempt bonds. ACS offers tailored post-issuance monitoring to remove guesswork from the process, providing Texas clients with timely, precise notifications and consulting support, while keeping detailed bond records aligned with state-specific arbitrage regulations.
Bond Compliance Training
ACS delivers a broad range of bond compliance training materials, including an all-encompassing policy manual to bring your internal arbitrage rebate program up to speed with current regulations. We also host local and regional seminars across the state.
Ongoing Consulting Services
ACS collaborates with Texas clients throughout the entire lifecycle of their bond issues, offering ongoing coordination and consultation with municipal advisors, bond counsels, trustees, and auditors. This ensures Texas issuers receive continuous support tailored to their bond compliance needs, adapting to local market conditions and regulatory updates.
Dedicated Support for Texas Issuers
Though ACS serves clients nationwide, we’re proud to have a dedicated presence in the Austin area to support issuers throughout Texas. Meet a few of the team members who bring that experience and support to life.
Josh Freeman
Vice President
Areas of Expertise: Specializes in Texas Bond Issuers, Pre/Post Issuance Compliance, Commingled Funds, Rebate Minimization, Large Debt Portfolios, Pooled Financing Issues, Housing Finance Authorities, Common Reserve Allocations, Bonds All Issuers
800.672.9993 ext. 7534
Nicole McKenna (Pahnke)
Director
Areas of Expertise: Pre/Post Issuance Compliance, Client Education, Relationship Management, Debt Portfolio Analysis, Rebate Minimization, Quality Assurance, Bonds All Issuers
800.672.9993 ext.7520
FAQs
What is Yield Restriction?
Yield restriction limits the earnings on certain municipal bond proceeds to prevent excessive arbitrage profits. If funds remain unspent beyond allowed periods, they must be invested at or below the bond yield or adjusted through payments to the IRS to maintain tax-exempt status. To learn more about yield restriction, please visit our blog.
Do you provide ongoing Bond Compliance Services?
We do! ACS maintains an accurate account of your tax-exempt bond issues, including performing necessary calculations. As part of our bond compliance program, we determine arbitrage rebate and yield restriction requirements for each bond issuance. We’ll also provide recommendations for minimizing liabilities through applicable temporary periods and spending exceptions.
What are Arbitrage Rebate requirements?
State and local government issuers benefit from lower borrowing costs through tax-exempt debt issuances. Bondholders investing in these tax-exempt debt offerings get to exclude the interest received on their federal income tax returns. It’s a mutually beneficial relationship. The arbitrage rebate requirements consist of two sets of rules that, when applied, determine whether bonds are arbitrage bonds. If issuers do not carefully follow these rules, bonds can lose their tax-exempt status. Bonds that fall out of compliance are taxable, retroactive to the date of issuance. This could be an expensive mistake and one that may not be in your budget!
Do you offer Form 8038 Prep Consulting?
Yes! As part of our calculation services, ACS prepares your Form 8038-T for submission to the IRS. Form 8038-T accompanies your payment of any rebate or yield restriction liability. All you have to do is sign and send it off with a smile.
We also offer Form 8038-R consulting for recoverable overpayments. We’ll help you request a refund from the IRS if you made an overpayment with a prior rebate provider. Refund requests must be filed no later than two years and 60 days after the final computation date.