To accommodate COVID-19-related social distancing requirements, the IRS on May 4, 2020, released Revenue Procedure 2020-21, which provides temporary relief from the in-person public hearing requirement for tax-exempt qualified private activity bonds, including 501(c)(3) bonds.
Section 147(f) of the Internal Revenue Code and its underlying regulations generally require that a public hearing be held for such bonds at a location that, based on the facts and circumstances, is convenient for residents of the approving governmental unit. Due to the COVID-19 pandemic, some states and local governments are seeking alternatives to in-person hearings.
Revenue Procedure 2020-21 provides that a hearing held between May 4, 2020, and Dec. 31, 2020, that is accessible to residents by a toll-free telephone number will satisfy the federal public hearing requirement. This revenue procedure is effective as of May 4, 2020, and may be applied retroactively.
Note that while this guidance provides relief from the federal public hearing requirement, issuers must still abide by any additional state and local laws for public hearings, which may still require in-person hearings.
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