Forms, Schedules, and Instructions for U.S. Tax-Exempt Returns

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TREASURY/IRS AND OMB USE ONLY DRAFT

Instructions for Form 8038-R
(Rev. November 2025)

Request for Recovery of Overpayments Under Arbitrage Rebate Provisions
Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments

For the latest information about developments related to Form
8038-R and its instructions, such as legislation enacted after
they were published, go to IRS.gov/Form8038R.

What’s New

Electronic payments. Per Executive Order 14247 (EO 14247),
if you have access to U.S. banking services or electronic
payment systems, you should use direct deposit for any refunds.
The IRS recommends paying electronically whenever possible.
Direct deposit. To implement EO 14247, we have added
direct deposit fields. If there is an overpayment on line 16a, enter
your direct deposit information on lines 16b, 16c, and 16d.

General Instructions

Note. Use a separate Form 8038-R for each issue (as defined in
Regulations section 1.150-1(c)).

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. 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 rebating arbitrage.

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.
Note. 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. 2024-37, which is on page 755 of Internal
Revenue Bulletin 2024-41 at IRS.gov/pub/irs-irbs/irb24-41.pdf.

Jul 29, 2025

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 needed.
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 calendar 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. 2024-37.
An issuer is entitled to appeal a refund claim denial. See Rev.
Proc. 2021-10, which is on page 503 of Internal Revenue Bulletin
2021-4 at IRS.gov/pub/irs-irbs/irb21-04.pdf, for details.

Instructions for Form 8038-R (Rev. 11-2025) Catalog Number 95711C
Department of the Treasury Internal Revenue Service www.irs.gov

DRAFT

DRAFT

We removed references to previous revenue procedures for filing
claims for recovery of overpayments that were modified and
superseded as of October 18, 2024, by Rev. Proc. 2024-37, as
further described under Recovery of Overpayment, later.

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.

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Where To File

File Form 8038-R, and attachments, with the Internal Revenue
Service, Ogden Submission Processing Center, Ogden, UT
84201.
Private delivery services (PDSs). Filers can use PDSs
designated by the IRS to meet the “timely mailing as timely filing”
rule for tax returns. Go to 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 IRS.gov/PDSstreetAddresses.

!

CAUTION

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
address.

Specific Instructions
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 the issuer receives the purchase
price in exchange for delivery of the evidence of indebtedness
representing any bond included in the issue.
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 on line 9 and consents to the disclosure of the issuer’s
return information to that individual, as necessary, in order to
process this return.

Part II. Request for Refund
Line 11. Current Regulations sections 1.148-1 through
1.148-11 apply to issues outstanding after June 30, 1993. If the
issue was outstanding prior to July 1, 1993, the 1992 regulations
apply (that is, Regulations sections 1.148-1 through 1.148-13T,
effective May 18, 1992 (T.D. 8418, 1992-1 C.B. 29)). However,
check the box if the issue was outstanding prior to July 1, 1993,
and the issuer has elected not to apply the 1992 regulations; in
such case, the current Regulations sections 1.148-1 through
1.148-11 apply.

2

The IRS is not responsible for a lost credit payment if
you enter the wrong account information. Check with
CAUTION your financial institution to get the correct ACH routing
and account numbers and to make sure your direct deposit will
be accepted. Other wire instructions or routing or account
numbers other than ACH routing or account numbers are not
acceptable substitutes for ACH routing and account numbers on
Form 8038-R.

!

If the amount of the direct deposit to the designated account is
different from the amount you expected, you will receive an
explanation in the mail about 2 weeks after your credit payment
is deposited.
Line 16b. The ACH routing number must be nine digits. The first
two digits must be 01 through 12 or 21 through 32. Otherwise,
the direct deposit will be rejected and a check will be sent
instead. If the entity listed in Part I is not the issuer (such as a
trustee bank), ask that entity for the correct routing number.
Line 16c. Check the appropriate box for the type of account. Do
not check more than one box. If unknown, leave blank.
Line 16d. The ACH account number can be up to 17 characters
(both numbers and letters). Include hyphens but omit spaces
and special symbols. Enter the number from left to right and
leave any unused boxes blank.
Line 17. Provide the computations of the overpayment paid as
part of a rebate payment, penalty in lieu of rebate, or to terminate
the penalty in lieu of rebate. Also, include the computations for
any previously paid interest for late filing. A description of the
facts that led to the overpayment must be included on this form.
Line 18. Provide a schedule showing amounts and dates that
payments were made to the United States for the issue. Attach
copies of Form(s) 8038-T that accompanied payments to the
United States.

Part III. Other Information
Line 20. The final computation date is the date the issue is
discharged. For details, see Regulations section 1.148-3(e)(2).
Line 21. Enter the name and EIN of an entity, other than a
governmental entity, that is to use proceeds of these obligations.
If more than one, attach a schedule.
Line 22. If the issuer wishes to authorize the IRS to
communicate directly with a person who is a representative of
the entity listed on line 21, check the box and enter the name
and telephone number of such person.
Note. By authorizing a person other than an authorized officer of
the issuer to communicate with the IRS and whom the IRS may
contact with respect to this return, the issuer authorizes the IRS
to communicate directly with the individual entered on line 22
and consents to disclose the issuer’s return information to that
individual, as necessary, in order to process this return.

Signature and Consent

An authorized representative of the issuer must sign Form
8038-R and any applicable certification. Also print the name and
title of the person signing Form 8038-R.
The authorized representative of the issuer signing this form
must have the authority to consent to the disclosure of the
issuer's return information, including information provided on the
issuer’s corresponding Form 8038-T, as necessary to process
this return, to the person(s) designated on Form 8038-R.

DRAFT

DRAFT

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.

Line 16a. Complete lines 16b through 16d if you want the
amount shown on line 16a directly deposited into a checking or
savings account.

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Note. If authority is granted on line 9 or line 22 for the IRS to
communicate with a person other than an officer of the issuer, by
signing this form, the issuer’s authorized representative consents
to the disclosure of the issuer’s return information, as necessary
to process this return, to such person.

Paid Preparer
If an authorized representative of the issuer filled in its return, the
paid preparer’s space should remain blank. Anyone who
prepares the return but doesn’t charge the organization shouldn’t
sign the return. Certain others who prepare the return shouldn’t
sign. For example, a regular, full-time employee of the issuer,
such as a clerk, secretary, etc., shouldn’t sign.
Generally, anyone who is paid to prepare a return must sign it
and fill in the other blanks in the Paid Preparer Use Only area of
the return.
The paid preparer must:

• Sign the return in the space provided for the preparer’s

Paperwork Reduction Act Notice. We ask for the information
on this form to carry out the Internal Revenue laws of the United

You are not required to provide the information requested on
a form that is subject to the Paperwork Reduction Act unless the
form displays a valid OMB control number. Books or records
relating to a form or its instructions must be retained as long as
their contents may become material in the administration of any
Internal Revenue law. Generally, tax returns and return
information are confidential, as required by section 6103.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated burden
for tax-exempt organizations filing this form is approved under
OMB control number 1545-0047 and is included in the estimates
shown in the instructions for their information return.
Comments and suggestions. If you have comments
concerning the accuracy of this time estimate or suggestions for
making this form simpler, we would be happy to hear from you.
You can send us comments from IRS.gov/FormComments. Or
you can write to Internal Revenue Service, Tax Forms and
Publications Division, 1111 Constitution Ave. NW, IR-6526,
Washington, DC 20224.
Do not send the form to this address. Instead, see Where To
File, earlier.

DRAFT

DRAFT

signature (a facsimile signature is acceptable),
• Enter the preparer information, and
• Give a copy of the return to the issuer.

States. You are required to give us the information. We need it to
ensure that you are complying with these laws.

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