Arbitrage Rebate

  • Overview
  • Attorneys
  • Publications

Kutak Rock is one of very few law firms to invest in, develop and maintain an affiliate—Kutak Rock Arbitrage Consulting LLC—devoted to the computer-based analysis of financial problems unique to public borrowers. Since 1986 Kutak Rock Arbitrage Consulting LLC, under the guidance of our tax department, has calculated and reported on the arbitrage rebate liability for more than 3,000 tax-exempt bond issues aggregating $50 billion. These services have focused on minimizing the arbitrage rebate liability for all types of situations.

Kutak Rock’s rebate services include the following for each bond issue:

  • Analyzing bond legal documents and classifying each investment transaction based upon financial information provided by the issuer, the borrower or the trustee.
  • Ascertaining whether certain funds may qualify for a six-month, 18-month or two-year rebate exception.
  • Preparing a summary of the investment activity for all investments; an independent bond yield computation; an arbitrage rebate liability computation; and an investment yield computation.
  • Delivering our report, with computations attached, showing the amount of any arbitrage rebate liability.
  • Preparing Internal Revenue Service Forms 8038-T and providing instructions relative to filing and paying the liability.
  • Assisting with any Internal Revenue Service inquiry.
  • Providing advice about the impact of proposed and promulgated regulations on arbitrage and rebate compliance.
  • Providing any required Kutak Rock opinions.

Typical arrangements provide for either annual, interim or five-year rebate computations. Fee quotes will be furnished upon request.

Mr. Thomas S. Hageman, a certified public accountant in our Omaha office, has primary responsibility for the completion of all arbitrage rebate calculations. He works with a team of tax attorneys, accountants and financial analysts to provide arbitrage rebate compliance services.