 MuniFinancial was retained by Rancho California Water District, CA to review the rebate payment due on a variable rate bond that appeared to be higher than expected. We reviewed the calculation and discovered that the yield optimization section of the IRS Regulations had not been applied in making the initial determination. As a result of our work in utilizing this section of the Regulations that allows an issuer to choose the most advantageous "yield to earnings" time period to derive the lowest possible rebate liability, the liability was recalculated, which significantly lowered the rebate liability owed to the IRS.
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