Form 8038-R (Rev. 9-2017)
Section references are to the Internal Revenue Code unless otherwise
For the latest information about developments related to Form 8038-R,
such as legislation enacted after they were published, go to
Claims for recovery of overpayments cannot be filed later than the date
that is 2 years after (1) the date that is 60 days after the final
computation date of the issue to which the payment relates; or (2) with
respect to the portion of the overpayment paid more than 60 days after
the final computation date, the date that the payment was made to the
United States. See Rev. Proc. 2017-50, which is on page 234 of Internal
Revenue Bulletin 2017-37 at www.irs.gov/pub/irs-irbs/irb17-37.pdf.
Note: Use a separate Form 8038-R for each issue.
Purpose of Form
Form 8038-R is used by issuers of state and local bonds to request a
refund of amounts paid with Form 8038-T, Arbitrage Rebate, Yield
Reduction, and Penalty in Lieu of Arbitrage Rebate.
Payments made with Form 8038-T that may be recoverable include:
1. Yield reduction payments,
2. The arbitrage rebate to the United States,
3. A penalty in lieu of rebating arbitrage to the United States, or
4. A penalty to terminate the election to pay a penalty in lieu of
Recovery of Overpayment
In general, an issuer may recover an overpayment of rebate for an issue
of bonds by establishing to the IRS that the overpayment occurred. An
overpayment is the excess of the amount paid to the United States for
an issue under section 148 over the sum of the rebate amount for the
issue as of the most recent computation date and all amounts that are
otherwise required to be paid under section 148 as of the date the
recovery is requested.
An overpayment may be recovered only to the extent that a recovery
on the date that it is first requested wouldn’t result in an additional
rebate amount if that date were treated as a computation date.
Except for overpayments of penalty in lieu of rebate under section
148(f)(4)(C)(vii) and Regulations section 1.148-7(k), an overpayment of
less than $5,000 may not be recovered before the final computation
date. See Regulations section 1.148-3(i).
The amount of rebate overpayment is based on the amount actually
paid, not the future value of the amount paid.
Note: Regulations section 1.148-3(b) provides that as of any date, the
rebate amount for an issue is the excess of the future value, as of that
date, of all receipts on nonpurpose investments over the future value, as
of that date, of all payments on nonpurpose investments. The definitions
of payments and receipts in Regulations section 1.148-3(d), in part,
require inclusion of transactions (including, but not limited to,
acquisition, earnings, and return of principal) on a date for each
nonpurpose investment. Any cash flow representation to the contrary
may result in the understatement of rebate amount. Yield reduction
payments are determined using payments and receipts as described in
Regulations section 1.148-5(b)(1).
Processing the Request
When filing Form 8038-R, you must provide:
• All copies of Form(s) 8038-T related to the request for refund, and
• The computations of the overpayment and interest (if any) on line 17.
The computations must show all cash flows from the issue date to the
computation date reflecting the overpayment (for example, if a series of
reports were prepared, all such reports must be provided, unless the
last report details all cash flows). Provide any additional attachments if
Generally, this information will be sufficient to determine whether a
refund is appropriate. For refund claim rejections where there is a
procedural deficiency or where an issuer has failed to provide sufficient
information to enable a determination that an overpayment occurred, the
IRS will contact the issuer or its representative to resolve the deficiency.
If all the requested information isn’t timely received, a letter will be sent
explaining that the request for recovery is deficient and that its
processing is rejected.
For refund claim denials, in full or in part, if the IRS makes a
preliminary determination to deny a refund claim, the IRS will notify the
issuer in writing that it may submit additional information or participate
in a conference, or both. Additional information must be submitted
within 21 days of the request for additional information or the
conference. If the issuer fails to submit additional information or if the
IRS disagrees that an overpayment occurred, the IRS will send the
issuer a registered or certified letter denying the claim, subject to the
issuer's appeal rights.
The procedures for processing a request for refund are detailed in
Rev. Proc. 2008-37, which is on page 137 of Internal Revenue Bulletin
2008-29 at www.irs.gov/pub/irs-irbs/irb08-29.pdf as modified by Rev.
An issuer is entitled to appeal a refund claim denial. See Rev. Proc.
2006-40, which is on page 694 of Internal Revenue Bulletin 2006-42 at
www.irs.gov/pub/irs-irbs/irb06-42.pdf, for details.
Where To File
File Form 8038-R, and attachments, with the Internal Revenue Service,
Ogden Submission Processing Center, Ogden, UT 84201.
Private delivery services. Filers can use certain private delivery
services (PDSs) designated by the IRS to meet the “timely mailing as
timely filing” rule for tax returns. Go to www.irs.gov/PDS for the current
list of designated services.
The PDS can tell you how to get written proof of the mailing date.
For the IRS mailing address to use if you’re using a PDS, go to
PDSs can’t deliver items to P.O. boxes. You must use the
U.S. Postal Service to mail any item to an IRS P.O. box
Line 1. Enter the name of the governmental entity that issued the
bonds, not the name of the entity receiving the benefit of the financing.
Part I. Reporting Authority
Line 6. Enter the date of issue. This date should be identical to the date
on the corresponding Form 8038-T, Part I, line 6. This is generally the
first date on which there is a physical exchange of the bonds for the
Line 7. Enter the name of the issue. This name should be identical to the
name listed on the corresponding Form 8038-T, Part I, line 7. If there is
no name, please provide other identification of the issue.
Line 8. Enter the CUSIP (Committee on Uniform Securities
Identification Procedures) number of the bond with the latest maturity.
The CUSIP number should be identical to the CUSIP number listed on
the corresponding Form 8038-T, Part I, line 8. Enter “None” if the issue
doesn’t have a CUSIP number.
Lines 9 and 10. Enter the name, title, and telephone number of the
officer of the issuer whom the IRS may call for more information. If the
issuer designates a person other than an officer of the issuer (including
a legal representative or paid preparer) whom the IRS may call for more
information with respect to this return, enter the name, title, and
telephone number of such person here.
Note: By authorizing a person other than an authorized officer of the
issuer to communicate with the IRS and whom the IRS may call for
more information with respect to this return, the issuer authorizes the
IRS to communicate directly with the individual listed in line 9 and
consents to the disclosure of the issuer’s return information to that
individual, as necessary, in order to process this return.