The IRS put together a team in February to investigate municipal bond transactions. It is interviewing its Tax-Exempt Bond personnel about questionable transactions involving possible bid rigging and price fixing and will eventually search externally for additional data.
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The idea is to provide a public resource
where issuers can flag potential problems over the life of a bond from issuance to maturity. The IRS has the goal of utilizing the team to initiate the project and then invite the Government Finance Officer’s Association debt committee and other groups involved in the municipal market to join in.
This indicates a higher level of scrutiny for municipal bond transactions and seems to be yet another area where regulation is broadening in the financial and investment industry.