IRS forgoes tax on West Covina U.S.D., Calif.'s series 2002A bonds

By Cristal Cody

Springdale, Ark., July 28 - The Internal Revenue Service has agreed that the series 2002A general obligation refunding bonds from West Covina Unified School District in California are not subject to federal income tax, according to a notice.

The IRS had been examining the $20.41 million bonds and had preliminarily ruled that income from the bonds was subject to tax.

But now the IRS has agreed that past, present and future owners of the bonds, and the prior bonds refunded by the series, are not required to include in their gross income any interest on the bonds.

Kinsell Newcomb & De Dios Inc. was the underwriter for the sale.

The IRS has closed its examination of the bonds, but the agency reserves the right to take other action, including taxing the bondholders on interest earned on the bonds and prior bonds if violations arise after the effective date of the closing agreement.

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