Quote:
Originally Posted by Advogado
Why the hostility? I didn't just say "take my word", I told you how you could verify my word. I merely cautioned that doing so would take a bit of work on your part. Did you click on the link I gave you and read the Official Statements? Although I said I wouldn't walk you through it, I will give you some help:
"The District has covenanted in the Indenture to comply with all provisions of the Code necessary, among other things, to maintain the exclusion from gross income of interest of the Series 1999 Bonds for purposes of federal income taxation." Direct quote form the Official Statement for the 5/1/96 Rec. Rev. 1996A bonds issued by the Villages Center District. Please check it.
Also, a common sense test regarding the question of liability: If the Center Districts were not going to end up holding the bag if the IRS prevails, why do you think that they are spending hundreds of thousands of dollars in attorneys' fees fighting the IRS?
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Your link produced a blank slate.
The District can only comply with provisions existing at the time of issuance which it s suggested, they did comply. The IRS being what they are, changed the game.
There are nearly 580 CDDs operating in Florida alone that have been relying on the assumption that they are political subdivisions that can issue tax-exemot bonds. The decision also threatens the tax-exempt status of bonds issued by thousands of organizations with similar structures around the country.
“The IRS seems to be adding a new requirement for an issuer to be a political subdivision,” said Scott Lilienthal, president of the National Association of Bond Lawyers and a partner with Hogan Lovells US LLP. “That new requirement doesn’t seem to be based on any existing authority. If the IRS wants to revisit the definition of a political subdivision then it should so through the formal rulemaking process and issue guidance on a prospective basis only.”
Why wouldn't the District defend itself against a dishonest IRS that admittedly unfairly targets specific individuals and organizations for nefarious reasons?