IRS Recordkeeping Requirements

The IRS requires that issuers of tax-exempt bonds maintain certain records for as long as the bonds are outstanding, plus three years after the date they are redeemed or repaid.

Beneficial owners of tax-exempt bonds do not generally have any physical proof to support their exclusion of municipal bond interest when filing taxes, so the IRS relies on the issuer to maintain records and provide this support for the beneficial owners.

If the issuer does not maintain records properly and cannot provide necessary information to the IRS upon request, the IRS might deem the issuer noncompliant, which cou