The J. Paul Getty Trust has retained its tax-exempt status after a two-year audit by the Internal Revenue Service, the Bond Buyer newspaper reported.

The investigation, which covered compensation, grants and other expenditures at the trust, focused on $371 million in tax-exempt bonds issued by the California Infrastructure and Economic Development Bank on behalf of the non-profit trust.

The bonds, including $275 million in Series 2003 variable-rate revenue bonds and $96 million in Series 2004 variable-rate revenue bonds, were issued to refund $95.6 in certificates of participation used to finance construction at the Getty Museum in Los Angeles and construction at the Getty Villa, Bond Buyer said. The Getty Villa has been closed for construction and will reopen next year.

In May, the IRS sent a letter upholding the Getty's tax-exempt status and identifying three areas requiring further action on the trust's part, including the need to improve documentation of items for sale in its bookstore, the newspaper said.

A state investigation of the trust is continuing.

The California Attorney General's Office launched a wide-ranging probe into the trust's financial practices in early August. State regulators requested eight years of records relating to trust Chief Executive Barry Munitz's compensation and expenses, as well as expenditures made for his wife, grants, gifts to trustees and a 2002 real estate transaction. Regulators also asked for documents connected to criminal charges pending in Italy against the Getty's curator for antiquities who allegedly conspired to purchase looted artifacts.

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