IRS Instruction 8038-B – IRS Forms, Instructions, Pubs 2026 – If you’re a governmental issuer, bond counsel, or financial advisor handling legacy Build America Bonds or Recovery Zone Economic Development Bonds, understanding IRS Instruction 8038-B (Instructions for Form 8038-B) is essential for compliance. This official guide details how to prepare and file the Information Return for Build America Bonds and Recovery Zone Economic Development Bonds.
Although the authority to issue new bonds reported on Form 8038-B expired on January 1, 2011, the form remains critical for amended returns, ongoing direct-pay credit claims via Form 8038-CP, and IRS compliance reviews.
This SEO-optimized guide, drawn directly from the official IRS Instructions for Form 8038-B (Rev. September 2018) and current IRS resources, walks you through purpose, eligibility, deadlines, line-by-line completion, attachments, and related forms. Download the latest PDF here: IRS Instructions for Form 8038-B.
What Are Build America Bonds and Recovery Zone Economic Development Bonds?
Build America Bonds (BABs) are taxable state or local governmental bonds authorized under the American Recovery and Reinvestment Act (ARRA) of 2009. They come in two types:
- BABs (Tax Credit) — Holders receive a federal tax credit (section 54AA(d)).
- BABs (Direct Pay) — Issuers elect a refundable credit payment from the IRS (section 54AA(g) and 6431).
Recovery Zone Economic Development Bonds (RZEDBs) are taxable bonds used for qualified economic development in designated Recovery Zones (section 1400U-2), with issuers receiving a refundable credit under section 6431.
These bonds provided federal subsidies to stimulate infrastructure and economic recovery but could not be issued after December 31, 2010.
Purpose of Form 8038-B
Form 8038-B provides the IRS with required information under IRC section 149(e) for monitoring compliance with arbitrage, volume cap, and credit payment rules. Issuers must file a separate Form 8038-B for each issue of BABs (Tax Credit), BABs (Direct Pay), or RZEDBs issued after February 2010 and before January 1, 2011.
Key note: BABs (Tax Credit), BABs (Direct Pay), and RZEDBs each require their own form—even within the same financing.
Who Must File IRS Form 8038-B?
Governmental issuers of these bonds must file. Private activity bonds under section 141 are excluded. Each bond type in a mixed issue requires a separate filing. Variable-rate and fixed-rate bonds within one issue can be reported together but need separate debt service schedules.
When and Where to File Form 8038-B?
Deadline: File by the 15th day of the second calendar month after the close of the calendar quarter in which the bonds were issued (e.g., bonds issued in January–March are due May 15).
You cannot file before the issue date. For Direct Pay BABs and RZEDBs, file Form 8038-B at least 30 days before submitting the first Form 8038-CP for credit payments.
Mailing address:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201
Private delivery services (PDS) are allowed—check IRS.gov/PDS for approved carriers.
Late filing: Request relief under Rev. Proc. 2002-48 by writing “Request for Relief under Section 3 of Rev. Proc. 2002-48” at the top and attaching an explanation. Late filings for credit-payment issues must still meet the 30-day rule.
Penalties and Compliance Warnings
Failure to file correctly or attach required schedules can delay processing of Form 8038-CP credit payments. No specific monetary penalty is listed in the instructions, but general IRC rules apply, and inaccurate reporting risks audits or disallowed credits.
Step-by-Step: How to Complete Form 8038-B (Line-by-Line Overview)?
Part I – Reporting Authority
Enter issuer name (Line 1), EIN (Line 2), contact person (Line 3), issue date (Line 7), CUSIP for latest maturity (Line 9—attach full CUSIP schedule), and officer contact details.
Part II – Type of Bonds
Check the box for the bond type (BAB Tax Credit, BAB Direct Pay, or RZEDB). For Direct Pay or RZEDB, provide the first interest payment date and payment frequency. Attach labeled debt service schedules (fixed-rate vs. variable-rate).
Part III – Purpose of Issue
Allocate the total issue price to specific project categories (e.g., highways, schools for BABs; economic development for RZEDBs). Attach a schedule of organizations receiving proceeds with EINs and governmental/private status.
Part IV – Description of Obligations
Report stated redemption price at maturity, last maturity date, weighted average maturity (to two decimals), and yield (to four decimals; reduce by credit payments for Direct Pay/RZEDB; leave blank for variable rate).
Part V – Use of Proceeds
Detail sale proceeds, investment proceeds, issuance costs (≤2% for Direct Pay/RZEDB), credit enhancement, reserves, and any pre-issuance accrued interest or refunding uses.
Part VI – Description of Refunded Bonds (if applicable)
Provide details on refunded issues.
Part VII – Miscellaneous
Report volume cap allocation (attach certification), GICs, loans to other governments, hedges, arbitrage compliance procedures, and remedial action policies.
Signature and Consent
An authorized officer must sign and consent to disclosure of bond information.
Round all money amounts to whole dollars. Type or print clearly.
Required Attachments and Schedules
Always attach:
- Debt service schedules (fixed/variable)
- Full CUSIP list
- Project/use-of-proceeds schedule with recipient EINs
- Volume cap or Recovery Zone designation certification
- Any hedge or GIC details
Missing attachments delay processing—especially for credit payments.
Related IRS Forms for Bond Issuers
- Form 8038-CP — Request direct credit payments (file after Form 8038-B).
- Form 8038-T — Arbitrage rebate or penalty in lieu of rebate.
- Form 8038-G or 8038-GC — For any tax-exempt portion of mixed issues.
- Form 8038-TC — For other specified tax credit bonds.
If the issue mixes BABs/RZEDBs with tax-exempt bonds, file separate returns.
Frequently Asked Questions (FAQs)
- Can I file Form 8038-B in 2026?
Yes—for amended returns, corrections, or compliance on existing bonds. - Is there a newer version than September 2018?
No—the IRS still lists Rev. September 2018 as current; the Tax Cuts and Jobs Act ended new issuances, so no updates were needed. - What if my bonds have no CUSIP?
Write “None” on Line 9 and attach an explanation. - Do I need to file for stripped tax credits?
Yes—attach purchaser schedules with names, EINs, and CUSIPs.
Conclusion: Stay Compliant with Official IRS Form 8038-B Instructions
Properly completing IRS Instruction 8038-B ensures smooth processing of federal subsidy payments and protects against compliance issues on these historic bonds. Always use the official PDF from IRS.gov and consult a qualified tax professional or bond counsel for your specific situation.
Official Resources:
For the most current developments, visit IRS.gov/Form8038B regularly. Accurate filing supports continued federal credit payments on these important recovery-era bonds.
This guide is for informational purposes only and is not tax or legal advice. Refer directly to IRS publications for your filing.