Revisions to IRS Form 8038-CP and Instructions for Issuers of Tax Credit Bonds

Hawkins Advisory

10.29.2021

The Internal Revenue Service (“IRS”) has released, in draft form, a new Form 8038-CP, Return for Credit Payments to Issuers of Qualified Bonds (the “Form”), and new Schedule A, Specific Tax Credit Bonds Interest Limit Computation (“Schedule A”). While the new Form and Schedule A are not yet final and should not yet be used by issuers in their current form, the IRS’s objective in revising these documents is to accommodate electronic filing of the Form in 2022.

Issuers of build America bonds and recovery zone economic development bonds, as well as issuers of specified tax credit bonds (i.e., clean renewable energy bonds, qualified energy conservation bonds, qualified zone academy bonds and qualified school construction bonds (collectively, “Specified Tax Credit Bonds”)), that qualify for, and have elected to receive, a refundable credit, also referred to as an interest subsidy payment, under Internal Revenue Code § 6431, use Form 8038-CP to claim the refundable credit.

The new Schedule A must be completed by issuers of Specified Tax Credit Bonds and will be used to compute the amount of the refundable credit payment allowed under Internal Revenue Code § 6431(f). Schedule A eliminates the need for issuers of new clean renewable energy bonds and qualified energy conservation bonds to file separate Forms 8038-CP for each maturity of bonds on each interest payment date.

Early release draft forms can be found at https://www.irs.gov/draftforms and should not be relied on or filed until the final release of such form. Issuers should expect to use the revised Form 8038-CP and Schedule A beginning January 1, 2022.

The IRS will hold two Zoom meetings in November to explain the changes to Form 8038-CP and answer questions. Select the appropriate ID below to join the meeting:

Tuesday November 16, 2021 2:00PM Eastern Zoom meeting ID 161 789 8661
for paid preparers such as banks and bond counsel.
Wednesday November 17, 2021 1:00PM Eastern Zoom meeting ID 160 852 4420
for issuers that file their own Form 8038-CP.

To join by audio only, dial by your location and input the meeting ID when prompted: