Latest On IRS Bond Issue

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  #31  
Old 12-09-2012, 12:42 PM
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Originally Posted by mickey100 View Post
The issue is not how long they have been in place, but how they are operating in a manner not consistent with the intent of the laws regarding CDD's. No one knew that until the issues regarding the 2008 lawsuit came out and also the IRS investigation.
I can't see how you can come to that conclusion and present it as fact.

That is what bothers me. The LEAPING to conclusions.

What will happen if this all turns out to be a tempest in a teapot?

THEN..there will be something else that people will cause a ruckus about because they are just jealous of the fact that the Morses are mega rich.

You would think that some people had their leg amputated when the buffalo disappeared. The buffalo were there for two reasons. They were an attention getter and something to talk about on the tape...ala PT Barnum... and the presence of animals on land causes it to be taxed lower. That doesn't seem smarmy to me. But such a hue and cry.

You would think they murdered Bambi. They are in the business of selling an idea and land and building houses on it. And they do it so well!
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  #32  
Old 12-09-2012, 12:58 PM
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Originally Posted by mickey100 View Post
The issue is not how long they have been in place, but how they are operating in a manner not consistent with the intent of the laws regarding CDD's. No one knew that until the issues regarding the 2008 lawsuit came out and also the IRS investigation.
I am following the posts on TOTV closely while I mull over whether or not to relocate to The Villages. If I do come, I want to arrive as a frog, not as an ostrich. I do want to be an informed purchaser and resident.

By the way, if the attorneys representing the developer/CDD(s) before the IRS are as successful as Gracie is in advocating for the decisions, actions and interests of the developer they should surely succeed.
  #33  
Old 12-09-2012, 01:15 PM
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Originally Posted by graciegirl View Post
I can't see how you can come to that conclusion and present it as fact.

That is what bothers me. The LEAPING to conclusions.
The last time I looked, losing a 28 million dollar lawsuit after being sued is a fact.
  #34  
Old 12-09-2012, 02:45 PM
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The last time I looked, losing a 28 million dollar lawsuit after being sued is a fact.
The fact is that it was over 46 million dollars!
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  #35  
Old 12-09-2012, 03:17 PM
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Ah, but when you signed the contract at your closing, you agreed that you have no right or interest in the recreational facilities nor to how the the amenity fees are used:
4.1 (g) Purchasers of Homesites further agree, .......that the owners, their heirs, successors and assigns, do not have any right, title or claim or interest in and to the recreational areas, security facilities, dedicated or reserved areas or facilities contained therein or appurtenant thereto, by reason of the purchase of their respective Homesites, it being specifically agreed that, (1) the Developer, its successors and assigns, is the sole and exclusive owner of the areas and facilities, and (2) the Contractual Amenities Fee is a fee for services and is in no way adjusted according to the cost of providing those services.
I'm not trying to rub anyones face in this but it is what it is so, there's no sense fretting about it now.
You speak to assets but not to liabilities. I am not a legal expert so I would be interested in what the contract says about liabilities as respect amenities?

The direct parties to the Bond Issue were the Developer and the Officers of the two Governing Districts (VCCDD SLCCD) As such any acts of ommission or commission should rest solely with them.
Since the POA handled the 2008 Amneties lawsuit it would behoove residents to ask the POA to submit in writing a notification to the Developer and Two Commercial district that residents are looking to them to settle this matter should the IRS render an adverse verdict. Further the POA should let both parties know that we do want ensurances that our amentity fees are not being used to defend nor settle this matter. Finally, a copy of this notification should be sent to the IRS and the Florida Attorneys General. to stay silent is to leave the impression that we are in agreement with what the Developer and commercial did and are now doing. (ie silence equates to acceptance)

Again I am only offering my personal opinion as to how we may have someone defend our financial interest, if any.
  #36  
Old 12-09-2012, 03:41 PM
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No, the POA was not involved in that lawsuit. It was initiated on behave of several TV residents who happened to be members/officers of the POA.

As for liabilities, TV residents have none with respect to the two special CDDs. Your amenity fee as stated is a fee for services. You pay your doctor a fee for their services but you’re not responsible for their liabilities.
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  #37  
Old 12-09-2012, 04:08 PM
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Although the Internal Revenue Code makes bondholders ultimately responsible for uncollected taxes if a tax-free bond is deemed taxable, the IRS rarely does so.

As stated in Section E of an Introduction to IRS Audits of Tax-Exempt Bonds, it is the stated policy of the (IRS) TEB program to attempt to resolve violations of the Code without taxing bondholders.

This is done for a couple of reasons:
  1. Trying to track down each bondholder including those that only own a minute fraction that is part of a muni fund would be an enormous task.
  2. The bond issuers (the two special CDDs) would have to recall or reissue the bonds anyway to cover the taxable status in the coming years until the bonds maturity.
  3. The negative press as exemplified by Ms. Ritchie’s articles would be detrimental in an already recessed real estate economy.
If the IRS were to prevail through all of the likely appeals processes, a settlement similar to the example outlined in Section E of the above referenced document is most likely.
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  #38  
Old 12-09-2012, 04:56 PM
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Question...I read the article in today's paper..even read it out loud to my husband to see if I understood everything correctly. Obviously, I did not. My understanding was that there were 2 CDDs specific to the IRS ruling, and was specific to bonds purchased by residents (and marketed as IRS deductible) by the Developer within a certain timeframe (prior to 2008). Is my interpretation flawed?

Last edited by applesoffh; 12-09-2012 at 04:57 PM. Reason: additional statement
  #39  
Old 12-09-2012, 05:11 PM
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Originally Posted by applesoffh View Post
Question...I read the article in today's paper..even read it out loud to my husband to see if I understood everything correctly. Obviously, I did not. My understanding was that there were 2 CDDs specific to the IRS ruling, and was specific to bonds purchased by residents (and marketed as IRS deductible) by the Developer within a certain timeframe (prior to 2008). Is my interpretation flawed?
Totally flawed. The bonds were not purchased by residents. They are sold to investors, usually institutional investors. The bonds in question have nothing to do with the bond on your house.

(from Ritchie's article) " . . . the Village Center district won't owe the IRS a nickel — the tax burden falls wholly on the holders and the buyers of the bonds. They would have to pay taxes on the interest they collected as the loans were being repaid."
  #40  
Old 12-09-2012, 06:02 PM
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Originally Posted by EdV View Post
Although the Internal Revenue Code makes bondholders ultimately responsible for uncollected taxes if a tax-free bond is deemed taxable, the IRS rarely does so.

As stated in Section E of an Introduction to IRS Audits of Tax-Exempt Bonds, it is the stated policy of the (IRS) TEB program to attempt to resolve violations of the Code without taxing bondholders.

This is done for a couple of reasons:
  1. Trying to track down each bondholder including those that only own a minute fraction that is part of a muni fund would be an enormous task.
  2. The bond issuers (the two special CDDs) would have to recall or reissue the bonds anyway to cover the taxable status in the coming years until the bonds maturity.
  3. The negative press as exemplified by Ms. Ritchie’s articles would be detrimental in an already recessed real estate economy.
If the IRS were to prevail through all of the likely appeals processes, a settlement similar to the example outlined in Section E of the above referenced document is most likely.
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Originally Posted by bike42 View Post
Totally flawed. The bonds were not purchased by residents. They are sold to investors, usually institutional investors. The bonds in question have nothing to do with the bond on your house.

(from Ritchie's article) " . . . the Village Center district won't owe the IRS a nickel — the tax burden falls wholly on the holders and the buyers of the bonds. They would have to pay taxes on the interest they collected as the loans were being repaid."
According to EdV's post the IRS rarely goes after bondholders for back taxes as it would too laborious a task.

According to Rictchie's article "...the Village Center district won't owe the IRS a nickel -- the tax burden falls wholly on the holders and the buyers of the bonds".

My question is -- the bondholders don't pay, the VC district doesn't pay, the developer doesn't pay...so does the $355 million dollars in loans just magically disappear? What am I missing here?
  #41  
Old 12-09-2012, 06:43 PM
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Originally Posted by graciegirl View Post
Money that would be rightfully theirs? I will link again to that lawsuit that you keep bringing up. Read this again please. Villages developer to pay $40 million for recreation upgrades to settle a lawsuit - Orlando Sentinel

ANYONE CAN SUE ANYONE. As a result of this LAWSUIT some individuals who live here apparently got a LOT of money.


Elaine Driedame is the president of the POA.

The developers maintain the areas and create beautiful new ones that I see south of 466 without anyone sueing them. I often wonder about that lawsuit.
Were you informed of this issue when you were purchasing your home and gambled the big hunk of change for your home?

That is called disclosure and failure to disclose this type of situation is frowned upon by The Florida Real Estate Association. The Sales people did not disclose and continue to not disclose this issue to buyers. Not a fair way to do business. Like purchasing a home and finding out that there might be a lawsuit pending regarding faulty construction and although known to the seller, the developer, and sales people, this issue was never disclosed to the buyer.

Last edited by Moderator; 12-09-2012 at 07:10 PM. Reason: typos
  #42  
Old 12-09-2012, 07:12 PM
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The IRS has a proven track record of shooting first and asking questions later. It is the only division of the government where the person or business is considered guilty as charged and the burden of proof is on the accused to PROVE that the IRS isn't correct.

Anyone who has ever been on the wrong side of the IRS knows it's a gut-wrenching experience, and it's very expensive to prove yourself correct. Lawyers who specialize in IRS law are some of the most expensive per-hour lawyers in practice.

So just because the IRS goes on a fishing expedition against the Morse family does not mean that they are guilty of any wrong-doing.

I also tend to doubt that anyone who bought a home in TV was dealing with persons who resembled either Vito Corleone or Luca Brasi who had a gun to their ear making them "an offer they couldn't refuse".
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  #43  
Old 12-09-2012, 07:40 PM
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i agree entirely. I bought here five years ago and I still marvel at the quality of the amenities, unequalled anywhere else I have been.
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Old 12-09-2012, 08:09 PM
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Originally Posted by bike42 View Post
Totally flawed. The bonds were not purchased by residents. They are sold to investors, usually institutional investors. The bonds in question have nothing to do with the bond on your house.

(from Ritchie's article) " . . . the Village Center district won't owe the IRS a nickel — the tax burden falls wholly on the holders and the buyers of the bonds. They would have to pay taxes on the interest they collected as the loans were being repaid."
Thank you for the clarification!
  #45  
Old 12-09-2012, 08:16 PM
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Originally Posted by eweissenbach View Post
As a future Villager, I do pay attention to the IRS issue, as well as anything else having to do with the development. I like to read the articles that Lauren Ritchie writes, as well as the POA statements, and the takes by various TOTVers who keep up on the subject. The great thing about living in a country which does not supress free speech, is the ability to read and hear about all the various sides, opinions, and takes on an issue, and then making one's own mind up about how it affects them. Ritchie is no lover of the developers, but that point of view is informative, even if it may be somewhat skewed. This issue gives me NO pause when considering TV as a future (part-time) home. I have said before, and will say again, the Morse organization has built the greatest utopia for retirees known to man. That does not make them infallable, perfect, or incapable of unlawful behavior, or operating on the fringe of ethics. The only thing that I can personally judge them on is the quality of life that they have provided for me while I am in TV, and on that level they are almost flawless.
Ed, I keep thinking that one of these days, you are going to post something I disagree with. But you never do. Sometimes I even think you read my mind.
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