Rebate Requirement under Internal Revenue Code Section 148
To understand rebate, you must understand arbitrage. Arbitrage occurs when securities purchased from one market are used for immediate resale in another to profit from the interest rate discrepancy. This is not a concept specific to tax exempt or tax advantaged bond financings.
Google Portlandia Internal Revenue Code Gross Proceeds Nonpurpose Investments Higher Yielding Investments Rebate Amount
Source: natlawreview.com