Proposed Regulations Affect Arbitrage Rules For Tax-Exempt Bonds

On March 12, 2026, the United States Treasury Department and the Internal Revenue Service published proposed regulations (the "Proposed Regulations") affecting the arbitrage bond provisions of Section 148 of the Internal Revenue Code of 1986 (the "Code") and the Treasury Regulations thereunder (the "Regulations"). The Proposed Regulations are available under REG-117298-21 in the Federal Register. We are evaluating the potential impacts of the Proposed Regulations on existing and future tax-exempt bond issuances and will provide updates to clients as warranted. Members of our national public finance tax group will work closely with industry associations to provide comments to the Treasury Department regarding the Proposed Regulations.