[cabo35]

It has been correctly noted in this thread that the IRS has defined rules for tax free bond status including political subdivisions that can issue tax exempt bonds. It does not offer rules that define the status of recently evolving Community Development Districts (CDD's)and Community Center Districts. (VCDD's) Therein lies the rub. This gray area exists for copious reasons cited previously in this thread. I suspect current Florida law, further clouds the issue and may in some cases be inconsistent with IRS regulations in areas of defining what is a political subdivision.

A central issue in the dispute is whether the VCDD's qualify as a political subdivision for the purpose of issuing tax exempt bonds. A compelling case that they qualify is made in the Villages submissions found in Bill-n-Brillo's very informative post in this thread. Some points to consider are:

Each district is governed by a board of elected supervisors after a
certain population is reached

CDD's are treated as special districts under Florida law.
Accordingly, they are subject to laws governing public officials and
interestingly they possess sovereign immunity.

VCCD's operate a public safety department that includes fire and
emergency medical services. It also maintains a Community Watch.
These are two ingredients of a public entity.

There is an entire list of components that define a political subdivision and a dearth of conclusive definable rules that would establish precedent. The Villages, in spite of their unique form of governance, seem to signifcantly comply with what defines a political subdivision contrary to the IRS's opinion. Hence, we have a dispute with the IRS.

I have completely understated the complexity of the IRS dispute. Perhaps someone else would like to expound on important points I have not included in order to save keystrokes and not put the reader to sleep with boring legalese. The input of those more knowledgeable is welcome.

My hope is that this post will put into perspective the nature of the beast and render him not as ominous as some have made it. I learned a lot from all the contributors on this thread and other relevant threads. It is my belief that the more we understand the nuances of the legal metamorphosis our fledgling, creative, governance system is going through, the less intimidating it becomes. Knowledge significantly reduces the fear of the unknown.

Be sure to take a hard look at the most recent references in Bill-n-Brillo's post.