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Originally Posted by Bizdoc
Reading this made a light bulb (albeit a dim one) go. Part of the dispute with the IRS is whether or not the VCDD is a "public entity". The IRS argues that it is not and thus can't act like a public entity.
However, if the State of Florida weighs in by insisting that the piece of land is now owned by a public entity (and thus must be publically accessible), then it makes the IRS case much weaker. The VCDD can't be public sometimes and private sometimes.
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First of all, it’s VCCDD not VCDD but aside from that you have misunderstood the IRS position as it now stands.
The VCCDD is a local, special purpose government under Florida law. That law includes the ability of the VCCDD to issue municipal bonds but not necessarily federally tax free municipal bonds.
It is the IRS current position that the VCCDD did not meet the IRS criteria for issuing those tax free bonds. So regardless of the final IRS outcome, the VCCDD would continue to exist as a local, special purpose government.