Get breaking news alerts via email

Click here to manage your alerts
Utah Regents, IRS could settle over bond tax errors
First Published May 09 2013 09:47 am • Last Updated May 09 2013 09:47 am

The State Board of Regents is considering a settlement with the Internal Revenue Service for some student loans bonds issued by the Utah Higher Education Assistance Authority (UHEAA).

According to an IRS announcement, the Voluntary Closing Agreement Program allows bond issuers with tax violations such as UHEAA to settle with the IRS.

Join the Discussion
Post a Comment

Federal tax rules require that student loan bond issuers can’t have more than a 2 percent spread on bonds to recoup administrative costs.

The IRS confirmed that "some bond issuers were unable to establish that their bonds did not violate the provision [Section 148 of the tax code]." As a result, the IRS created these closing agreements to allow bond issuers to comply with the rule.

Details about the nature of Utah’s accounting errors or the amount of the closing agreement have not been disclosed, but the IRS notes that the settlement amount will be "40 percent of the taxpayer exposure on each issue of the Bonds." In 2011, the Pennsylvania Higher Education Assistance Agency paid $12.3 million in such a settlement, as reported by The Bond Buyer, a newspaper that covers the municipal bond industry.

David Feitz, executive director of the Utah Higher Education Assistance Authority (UHEAA) and associate commissioner for student financial aid, said this issue has to do with financing student loans under the old Federal Family Education Loan Program (FFELP).

"[The closing agreement] has no consumer interest connection and has nothing to do with current student loans since UHEAA has not made student loans since June 2010 when the Federal Direct Student Loan program was initiated," Feitz said. "All public student loans are now made directly by the federal government."

After entering a closed session to discuss the settlement last Thursday, the UHEAA board of directors recommended that the State Board of Regents "execute a closing agreement in accordance with the Voluntary Closing Agreement Program." The matter now goes to the State Board of Regents for their consideration.

Feitz said all terms of the settlement will be made public once the regents vote on the issue, which, Feitz said, could be held in the next two to three months.


story continues below
story continues below

Twitter: @jnpearce

Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment

About Reader Comments

Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.