The Internal Revenue Service has closed its audit of the San Diego County Regional Airport Authority’s Series 2013B bonds with no change to the tax-exempt status of the securities.
The bonds in question were part of an issuance of $379.6 million of senior airport revenue bonds, divided up between a Series 2013A of $107.3 million and a Series 2013B for $272.3 million.
The Series 2013B bonds were issued to finance certain capital improvements at San Diego International Airport, fund a portion of the interest accruing on the Senior Series 2013 Bonds in addition to fund a reserve fund for the Senior Series 2013 bonds and pay the costs of issuance for the Senior Series bonds.
But on Sept. 3, 2021, the Airport Authority received a letter stating that the bonds had been selected for examination by the IRS.
The issuer then filed a voluntary notice on Oct. 13, 2021 in the EMMA system, stating the IRS examination was underway.
The airport authority was then notified on April 6, 2022, that the IRS, whose tax exempt bond office had been experiencing some staffing changes in recent years as it dealt with a backlog of cases clogged up partially as a result of the pandemic, had closed the audit with no change to the status of the bonds.
John Dillon, director of finance and risk management at the San Diego County Regional Airport Authority, said the Airport Authority had no comment on the IRS audit.
The authority has also been busy at work conducting its own internal audits, on various aspects of its operations.
“During the second quarter we made significant progress on our Fiscal Year 2022 Audit Plan, partnered with our construction auditor to complete a Risk Assessment for the Validation Phase of the Terminal and Roadways related to the New T1, and we commenced work on a new fraud manual,” the San Diego County Regional Airport Authority’s fiscal year 2022 second quarter report said.
“As of the end of the second quarter we completed 36% of planned audits and have approximately 46% of our planned audits in progress.”