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IRS Launches Probe Of Vernon $419M Bond Offering

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LOS ANGELES (CBS) — The city of Vernon faces an audit by the Internal Revenue Service over $419 million in bonds that may have violated tax laws, it was reported Monday.

The Los Angeles Times reported the IRS gave notice to the city over the issuance of the tax-exempt bonds in 2009 that the agency claims may have violated at least one tax provision.

The probe marks the third major investigation for the troubled Los Angeles County city in a year.

City officials said they will cooperate with the IRS, but no timetable or other specifics were offered regarding the details of the investigation, the Associated Press reported.

Lawmakers in Sacramento are pushing for to disincorporate after a series of scandals, including one in which three top officials have been convicted of spending public funds on lavish trips to New York City and other destinations.

(TM and © Copyright 2011 CBS Local Media, a division of CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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