[graciegirl]

Originally Posted by bkcunningham1

Did anyone else read the short story in the Daily Sun today, Saturday, November 3, 2012, regarding the "tentative" opinion from the Internal Revenue Service that the Community Development Districts are "not political subdivisions"?

According to the story, "If the IRS were to eventually determine such a position, district bonds would no longer qualify for tax-exempt status.

"That 'tentative' opinion has drawn considerable attention across the nation. The National Association of Bond Lawyers has voiced its concern, stating that such a position 'is not supported by existing authority and could substantially undermine the market for special district bonds, a long-standing form of financing utilized by a wide range of issuers n many states.' "

The article goes on to quote Richard Lehmann, publisher of the Distressed Debt Securities newsletter, who described the potential ruling by the IRS as, "as a real can of worms" that could apply to projects across the country. "It could shut off all future issuance of bonds by CDDs and raise costs significantly," Lehmann said.

The Daily Sun article said the Village Center Community Development District attorney Perry Israel, "emphasizes that even though the IRS has reached a tentative adverse ruling in the context of the technical advice memo, it does not necessarily mean that the agency's final conclusion will be adverse."

Doesn't sound hopeful.