Two dates governed the issue-price regulations published by the IRS on December 9, 2016. The regulations were effective that day, but the new definition applied to bonds sold on or after June 7, 2017. This December 10 weekend account covers Friday's publication, not a Saturday announcement. The applicability language used the sale date, which should not be silently replaced with the date of issuance. [2016-29486][2015-15411]
The definition served arbitrage restrictions on tax-exempt and other tax-advantaged bonds. Under the general rule for bonds issued for money, issue price was the first price at which a substantial amount sold to the public. Substantial meant ten percent. Separate determinations applied to bonds without identical credit and payment terms; sales to underwriters or related parties did not count as sales to the public. [2016-29486][2015-15411]
A June 2015 proposal provides the design history. Its alternative initial-price method contemplated restricting higher-priced orders before issuance, with a market-change exception. The final optional initial-offering-price method instead required written agreements not to offer or sell above that price through a defined period: until the earlier of the fifth business day's close after sale or qualifying substantial public sales. [2016-29486][2015-15411]
That comparison explains why an older proposal cannot substitute for the final conditions. It also distinguishes an optional method from the general rule; the hold was not a universal instruction for every bond sale. The two retained documents are stages of one IRS process, not independent corroboration of financial benefits. Their dates and definitions describe the historical framework, not individual tax or investment advice. [2016-29486][2015-15411]
Source documents
- Issue Price Definition for Tax-Exempt Bondshttps://www.govinfo.gov/content/pkg/FR-2016-12-09/html/2016-29486.htm
- Issue Price Definition for Tax-Exempt Bondshttps://www.govinfo.gov/content/pkg/FR-2015-06-24/html/2015-15411.htm