IRS Withholds, Then Releases, A New York City Build America Bond Subsidy

6/24/2010 8:50 AM

The IRS withheld $200,000 in BABs subsidy payments owed to New York City pursuant to the “offset rule”, based on the belief the City was delinquent in filing payroll documents. The federal government eventually released the subsidy payments, but not before raising concerns among municipal issuers about the potential pitfalls of the program.