The 501(c)(3) Opinion in Qualified 501(c)(3) Bond Transactions

In March 2013, the Board of Directors (the "Board") of the National Association of Bond Lawyers ("NABL") noted the absence of published commentary on legal opinions typically rendered by borrower's counsel and relied upon by bond counsel in qualified 501(c)(3) bond transactions to the status of the borrower as an organization described in Section 501 (c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). Despite the central role that the 501(c)(3) opinion plays in relation to the tax-exempt status of qualified 501(c)(3) bonds, there is no uniform 501(c)(3) opinion standard. As discussed in this report, the phrasing and interpretation of opinion language, and the nature and degree of due diligence supporting the opinion, may vary depending on the lawyer or the firm delivering the opinion, and practices may vary from region to region.

The complete article, "The 501(c)(3) Opinion in Qualified 501(c)(3) Bond Transactions," originally appeared in the August 2014 issue of NABL News. (login required)