Bryan wrote:
"The tax exempt status of all the (unearned?) profit for the Developer is what the IRS case is all about, but only a prepherial issue to most residents."
I do not believe this is correct. It was the central district that issued the tax exempt bonds, not the developer. He claimed a gain on his income tax return and paid taxes on that gain. The central district is on the hook if the tax exempt status is changed for the bonds. They may have to call the bonds and settle with the bondholders because of the lower interest rates the bondholders received and the taxes that they will have to pay. They will then have to issue new bonds at taxable rates, which are normally higher, however, during this economic climate that may not be the case.
Any financial penalties or expenses related to this issue will have to be paid by the central district. As I understand it, the central district has two ways to raise funds: payments received for amenity fees (which can only be raised based on CPI) and levying property taxes (which they have not done before but have the authority to do).
As some have mentioned, this may take awhile to play out but in the end, any financial penalties will probably be paid by the village residents in one form or another.
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