Information Return for Small Tax-Exempt

Governmental Bond Issues, Leases, and Installment Sales Form 8038-GC

OMB No. 1545-0720

© Under Internal Revenue Code section 149(e) © For calendar year ending 19 

Department of the Treasury

Internal Revenue Service (Use Form 8038-G if the issue price of the issue is $100,000 or more.)

Reporting Authority Check box if Amended Return ©

1 Issuer’s name 2 Issuer’s employer identification number

3 Number and street (or P.O. box if mail is not delivered to street address)

4 City, town, or post office, state, and ZIP code

Description of Obligations

5 Issue price of small tax-exempt governmental obligations reported on this form 5

6 Check the box that most nearly approximates the weighted average maturity of the obligation(s):

a Less than 5 years

b From 5 to 10 years

c More than 10 years

Check the box that most nearly approximates the weighted average interest rate on the

obligation(s):

7

a Less than 5%

b From 5% to 10%

c More than 10%

8 Total issue price of the obligation(s) reported on line 5 that is/are:

a Obligation(s) issued in the form of a lease or installment sale 8a

b Obligation(s) designated by the issuer under section 265(b)(3)(B)(i)(III) 8b

c Obligation(s) issued to refund prior issues 8c

d Loans made from the proceeds of another tax-exempt obligation 8d

Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge

Please and belief, they are true, correct, and complete.

Sign

Here

Issuer’s authorized representative Date Type or print name and title

If you have comments concerning the

accuracy of these time estimates or

suggestions for making this form simpler, we

would be happy to hear from you. You can

write to the Internal Revenue Service,

Attention: Tax Forms Committee, PC:FP,

Washington, DC 20224. DO NOT send the

form to this address. Instead, see Where To

File on page 2.

Who Must File

General Instructions

Section references are to the Internal

Revenue Code unless otherwise noted.

Paperwork Reduction Act Notice

We ask for the information on this form to

carry out the Internal Revenue laws of the

United States. You are required to give us the

information. We need it to ensure that you are

complying with these laws.

The time needed to complete and file this

form varies depending on individual

circumstances. The estimated average time

is:

Learning about the

law or the form 1 hr., 46 min.

Preparing the form 2 hr., 50 min.

Copying, assembling, and

sending the form to the IRS 16 min.

Form 8038–GC (Rev. 5-95)

Part I

Part II

© ©

Cat. No. 64108B

Room/suite

(Rev. May 1995)

9 Check box if issuer has elected to pay a penalty in lieu of arbitrage rebate

Purpose of Form

Form 8038-GC is used by issuers of

tax-exempt governmental obligations to

provide the IRS with the information required

by section 149(e) and to monitor the

requirements of sections 141 through 150.

Issuers of tax-exempt governmental

obligations with issue prices of less than

$100,000 must file Form 8038-GC.

Issuers of a tax-exempt governmental

obligation with an issue price of $100,000 or

more must file Form 8038-G, Information

Return for Tax-Exempt Governmental

Obligations.

Filing a separate return.—Issuers have the

option to file a separate Form 8038-GC for

any tax-exempt governmental obligation with

Filing a consolidated return.—For all

tax-exempt governmental obligations with

issue prices of less than $100,000 that are

not reported on a separate Form 8038-GC,

an issuer must file a consolidated information

return including all such issues issued within

the calendar year.

Thus, an issuer may file a separate Form

8038-GC for each of a number of small

issues and report the remainder of small

issues issued during the calendar year on one

consolidated Form 8038-GC. However, a

separate Form 8038-GC must be filed to give

the IRS notice of the election to pay a penalty

in lieu of arbitrage rebate.

An issuer of a tax-exempt bond used to

finance construction expenditures must file a

separate Form 8038-GC for each issue to

give notice to the IRS that an election was

made to pay a penalty in lieu of arbitrage

rebate (see line 9 instructions).

an issue price of less than $100,000. Each

such separate return should specify the

calendar year in which the issue was issued.
Form 8038-GC (Rev. 5-95) Page 2

Line 5.—Small governmental obligations are

those with an issue price of less than

$100,000. If the obligations are reoffered to

the public by an intermediary, the issue price

is the reoffering price (excluding accrued

interest).

The issue price of an obligation means the

principal amount due on the obligation and

does not include interest paid or to be paid.

Therefore, line 5 should include only the

principal amount due on obligations. For

example, only the purchase price of an asset

acquired pursuant to a lease should be

included on line 5. A lease or installment sale

is treated as issued on the date interest starts

to accrue.

Where To File

File Form 8038-GC with the Internal Revenue

Service Center, Philadelphia, PA 19255.

Specific Instructions

Part I—Reporting Authority

Definitions

Amended return.—If this is an amended

Form 8038-GC, check the amended return

box. Complete Part I and only those lines of

Form 8038-GC that are being amended. Do

● A “tax-exempt obligation” is not limited to

the formal issuance of bonds. It also includes

installment purchase agreements and

financial leases.

Line 6.—The weighted average maturity is

determined by multiplying the issue price of

each obligation reported on this form by its

maturity in years, adding the results for all the

obligations reported on this form, and then

dividing the total by the total issue prices of

all the obligations. For a lease or installment

sale, the maturity is the total number of years

the lease or installment sale will be

outstanding.

● A “tax-exempt governmental obligation” is

a tax-exempt obligation that is not a private

activity bond.

● A “private activity bond” is generally an

obligation issued as part of an issue of which

(1) more than 10% of the proceeds are to be

used for any private business use, and

(2) more than 10% of the payment of

principal or interest of the issue is either

secured by an interest in property to be used

for a private business use (or payments in

respect of such property), or is to be derived

from payments in respect of property (or

borrowed money) used for a private business

use. An obligation is also considered a private

activity bond if the amount of the proceeds to

be used to make or finance loans (other than

loans described in section 141(c)(2)) to certain

persons exceeds the smaller of 5% of the

proceeds, or $5 million. Report private activity

bonds on Form 8038, Information Return for

Tax-Exempt Private Activity Bond Issues.

Line 1.—The issuer’s name is the name of

the entity issuing the obligations, not the

name of the entity receiving the benefit of the

financing. In the case of a lease or installment

sale, the issuer is the lessee or purchaser.

Line 7.—The weighted average interest rate is

the average interest rate on all the obligations

reported on this form, weighted in proportion

to the issue price and length of maturity of

each obligation.

Line 8.—Enter the total issue price of the

obligations reported on line 5 that are

described on lines 8a through 8d. More than

one line may apply to a particular obligation.

For example, report on line 8b and line 8c,

obligations issued to refund prior issues that

were designated by the issuer under section

265(b)(3)(B)(i)(III).

Line 2.—An issuer that does not have an

employer identification number (EIN) should

apply for one on Form SS-4, Application for

Employer Identification Number. This form

may be obtained from most IRS and Social

Security Administration offices. File Form

SS-4 according to the instructions on that

form. If the EIN has not been received by the

due date for Form 8038-GC, write “Applied

for” in the space for the EIN.

Part II—Description of

Obligations

Arbitrage rebate.—Generally, interest on a

state or local bond is not tax exempt unless

the issuer of the bond rebates to the United

States arbitrage profits earned from investing

proceeds of the bond in higher yielding

nonpurpose investments. See section 148(f).

Construction issue.—A construction issue is

an issue of tax-exempt bonds if

(1) at least 75% of the available construction

proceeds of the issue are to be used for

construction expenditures with respect to

property that is to be owned by a

governmental unit or a 501(c)(3) organization,

and (2) all of the bonds that are part of the

issue are qualified 501(c)(3) bonds; bonds

that are not private activity bonds; or private

activity bonds issued to finance property to

be owned by a governmental unit or a

501(c)(3) organization. In lieu of rebating any

arbitrage that may be owed to the United

States, the issuer of a construction issue may

make an irrevocable election to pay a penalty.

The penalty is equal to 11⁄2% of the amount of

construction proceeds that do not meet

certain spending requirements. See section

148(f)(4)(C).

Late filing.—An issuer may be granted an

extension of time to file Form 8038-GC under

Section 3 of Rev. Proc. 88-10, 1988-1 C.B.

635, if it is determined that the failure to file

on time is not due to willful neglect. Send a

late Form 8038-GC to: Internal Revenue

Service, Philadelphia Service Center,

Statistics of Income Unit, P:DA: Unit F-SOI,

Philadelphia, PA 19255, Stop #335. Type or

print at the top of the form, “This Statement

Is Submitted in Accordance with Rev. Proc.

88-10.” Attach to the Form 8038-GC a letter

briefly stating why Form 8038-GC was not

submitted to the IRS on time. Also indicate

whether the obligation in question is under

examination by the IRS. Do not submit copies

of any bond documents, leases, or installment

sale documents.

Line 9.—Check this box if the issue is a

construction issue and an irrevocable election

to pay a penalty in lieu of arbitrage rebate

has been made on or before the date the

bonds were issued. The penalty is payable

with a Form 8038-T, Arbitrage Rebate and

Penalty in Lieu of Arbitrage Rebate, for each

6-month period after the date the bonds are

issued. Do not make any payment of penalty

in lieu of rebate with this form. See Rev.

Proc. 92-22, 1992-1 C.B. 736, for rules

regarding the “election document.”

● “Issue.” In general, obligations are treated

as part of the same issue only if they are

issued (1) by the same issuer, (2) on the

same date, and (3) pursuant to a single

transaction or to a series of related

transactions.

Exceptions—(a) Draw-down loans,

commercial paper, etc.—Obligations issued

during the same calendar year (1) pursuant to

a loan agreement under which amounts are

to be advanced periodically (“draw-down

loan”), or (2) with a term not exceeding 270

days, may be treated as part of the same

issue if the obligations are equally and ratably

secured under a single indenture or loan

agreement and are issued pursuant to a

common financing arrangement; e.g.,

pursuant to the same official statement that is

periodically updated to reflect changing

factual circumstances. In addition, for

obligations issued pursuant to a draw-down

loan that meets the requirements of the

preceding sentence, obligations issued during

different calendar years may be treated as

part of the same issue if all the amounts to

be advanced pursuant to the draw-down loan

are reasonably expected to be advanced

within 3 years of the date of issue of the first

obligation.

(b) Leases and installment sales.—

Obligations other than private activity bonds

may be treated as part of the same issue if

(1) the obligations are issued pursuant to a

single agreement that is in the form of a lease

or installment sale and (2) all of the property

covered by that agreement is reasonably

expected to be delivered within 3 years of the

date of issue of the first obligation.

When To File

To file a separate return, file Form 8038-GC

on or before the 15th day of the second

calendar month after the close of the

calendar quarter in which the issue is issued.

To file a consolidated return, file Form

8038-GC on or before February 15th of the

calendar year following the year in which the

issue is issued.

In general.—A Form 8038-GC must be

completed on the basis of available

information and reasonable expectations as

of the date the issue is issued. Forms that are

filed on a consolidated basis, however, may

be completed on the basis of information

readily available to the issuer at the close of

the calendar year to which the form relates,

supplemented by estimates made in good

faith.

● Obligations refer to a single tax-exempt

governmental obligation if Form 8038-GC is

used for separate reporting and refer to

multiple tax-exempt governmental obligations

if the form is used for consolidated reporting.

Rounding Off to Whole Dollars

You may show the money items on this

return as whole-dollar amounts. To do so,

drop any amount less than 50 cents and

increase any amount from 50 cents through

99 cents to the next higher dollar.

If Form 8038-GC is being filed for a single

issue only, enter the issue price of that issue.

not amend estimated amounts previously

reported once the actual amounts are

determined. (See the Part II instructions

below.)

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