Latest on IRS tax exempt bond issue

[Mr.Kris]

For those who are interested in reading, the latest publicly available communication between the VCCDD and the IRS is at http://districtgov.org/images/IRSupdates/IRS%20Update%20-%205-21-14.pdf You may want to read it for yourself and form your own opinion before others explain it to you providing their slant.

As we say in the federal bureaucracy, BLUF - Bottom Line Up Front, the Office of Tax Exempt Bonds has denied the VCCDD request for relief. In response the VCCDD request is being forwarded to the appropriate IRS Associate Chief Counsel for consideration. It is unlikely, however, that the Associate Chief Counsel will have a different opinion since this issue would have most probably already been vetted at the Office of Chief Counsel.

My opinion is this is a sidebar, and minor issue, to the larger concern of the VCCDD issuance of bonds for the purchase of facilities. That's another discussion.

For those who want an unbiased, and unabashed, discussion I'm in Hemingway now. Stop by and we'll have a civil discourse.

[North shore gal]

For those who are interested in reading, the latest publicly available communication between the VCCDD and the IRS is at http://districtgov.org/images/IRSupdates/IRS%20Update%20-%205-21-14.pdf You may want to read it for yourself and form your own opinion before others explain it to you providing their slant.

As we say in the federal bureaucracy, BLUF - Bottom Line Up Front, the Office of Tax Exempt Bonds has denied the VCCDD request for relief. In response the VCCDD request is being forwarded to the appropriate IRS Associate Chief Counsel for consideration. It is unlikely, however, that the Associate Chief Counsel will have a different opinion since this issue would have most probably already been vetted at the Office of Chief Counsel.

My opinion is this is a sidebar, and minor issue, to the larger concern of the VCCDD issuance of bonds for the purchase of facilities. That's another discussion.

For those who want an unbiased, and unabashed, discussion I'm in Hemingway now. Stop by and we'll have a civil discourse.
Soooo.... What does that mean in laymen terms? Will it cistern TV'ers more $... HOA fees?

[North shore gal]

Soooo.... What does that mean in laymen terms? Will it cistern TV'ers more $... HOA fees?
That is AFFECT (not Cistern) TV'gers?

[Indydealmaker]

Soooo.... What does that mean in laymen terms? Will it cistern TV'ers more $... HOA fees?

There is no legal HOA in The Villages. We have amenity fees. Increases to amenity fees are contractually tied to inflation. We will all be dead before there is any resolution to this matter.

[Bogie Shooter]

reads like another new IRS Agent putting her spin on the issue. Previous agents got reassigned................................

[Big O]

Oh no! We must prepare ourselves for another round of "The sky is falling" posts. Indydealmaker is right. We will all be dead before this is resolved so let's all worry about dog poop.

[janmcn]

Oh no! We must prepare ourselves for another round of "The sky is falling" posts. Indydealmaker is right. We will all be dead before this is resolved so let's all worry about dog poop.


Apparently there are some posters who are not aware that this eight year long IRS investigation is going on, or that the district has paid close to one million dollars to the developer's attorney to protect the developer's bottom line.

[Bogie Shooter]

Once again............don't worry about something that.................you cannot change.

[ilovetv]

Apparently there are some posters who are not aware that this eight year long IRS investigation is going on, or that the district has paid close to one million dollars to the developer's attorney to protect the developer's bottom line.

Yes, it is expensive to defend against the IRS and the endless stream of partisan appointees, not elected officials, who investigate and write these opinions on what is said in the 74,000 pages of federal tax code.

Yes, it's 74,000 pages. And these are opinions being issued.

Quiz: How many pages are in the U.S. tax code? - CNNMoney (http://money.cnn.com/quizzes/2013/pf/taxes/tax-code/1r.html?score=1&1=3)

[Bizdoc]

You can thank your Congress critter for the 74,000 pages. All the Tax Code does is restate all of the laws passed by that long winded body.

[Big O]

Apparently there are some posters who are not aware that this eight year long IRS investigation is going on, or that the district has paid close to one million dollars to the developer's attorney to protect the developer's bottom line.

And what does this add to the resolution of this situation?

[ilovetv]

You can thank your Congress critter for the 74,000 pages. All the Tax Code does is restate all of the laws passed by that long winded body.

"Critter" is right.

[NotFromAroundHere]

Not really 74,000 pages. The "Tax Code" would be the actual law. Somewhere less than 3,000 pages. Still pretty hefty.

[mickey100]

The bottom line is, yes, it is expensive to defend yourself when you've broken the law, as apparently The Villages has done with regard to tax law in this case. W'll have to wait and see how long the appeals can be stretched out. One would think that at some point, the appeals will end and the piper will have to be paid.

[Bogie Shooter]

The bottom line is, yes, it is expensive to defend yourself when you've broken the law, as apparently The Villages has done with regard to tax law in this case. W'll have to wait and see how long the appeals can be stretched out. One would think that at some point, the appeals will end and the piper will have to be paid.

Apparently? Your opinion is noted.

[TVMayor]

I wonder if the OP of the sinkhole threads is aware of the IRS topic.

[e-flyer]

I wonder if the OP of the sinkhole threads is aware of the IRS topic.

Oh God, don't get him started posting IRS threads. :cus:

[Bogie Shooter]

I wonder if the OP of the sinkhole threads is aware of the IRS topic.

Oh God, don't get him started posting IRS threads. :cus:

:a20:

[mickey100]

Apparently there are some posters who are not aware that this eight year long IRS investigation is going on, or that the district has paid close to one million dollars to the developer's attorney to protect the developer's bottom line.

:bigbow:

[Bizdoc]

Maybe the sink holes are caused by IRS moles undermining the District's legal position...

[ilovetv]

The bottom line is, yes, it is expensive to defend yourself when you've broken the law, as apparently The Villages has done with regard to tax law in this case. W'll have to wait and see how long the appeals can be stretched out. One would think that at some point, the appeals will end and the piper will have to be paid.

Well, gee. Being investigator, prosecutor, grand jury and judge, I guess you could wrap this all up by tomorrow, for free!

Maybe even land a Supreme Court appointment as compensation later!

[Villageshooter]

93% of the time the feds win! the odds are not good for us! as long as morris is on our side with us paying the bill,,, this will just linger on, till the feds get more millions out us! thank u morris family! we luv paying ur bills!

[buggyone]

93% of the time the feds win! the odds are not good for us! as long as morris is on our side with us paying the bill,,, this will just linger on, till the feds get more millions out us! thank u morris family! we luv paying ur bills!

Of course, you could always sell your house, make a nice profit, move away to a place where the "Morris" family will not irritate you, and be happy.

[Moderator]

The topic is the latest update on the IRS bond issue.

Please address the topic and not each other.

[Villageshooter]

Of course, you could always sell your house, make a nice profit, move away to a place where the "Morris" family will not irritate you, and be happy.

so sorry to offend

[mickey100]

The topic is the latest update on the IRS bond issue.

Please address the topic and not each other.


Its not working.

[justjim]

I feel about this IRS/Bond subject the same as I did when I took my first really tough course at the College level. "Jim you are really in way over your head", I said to myself.

The difference: I had to deal with the subject matter many years ago but guess what---don't want to and don't have to now. Leave this to the attorneys----they are getting well paid to deal with this issue. FORE!

[mickey100]

You don't have to deal with it, and frankly I don't want to think about it either. But what really bugs me is when people bury their head in the sand, and act like nothing is wrong, or spout some vitriol at those who are concerned. It has the potential for negative consequences to the residents, so to pretend nothing is wrong, seems like a real cop out to me. Sorry if that offends anyone, but we are all entitled to our opinions. Anything that might affect my lifestyle, or pocketbook, is going to get my scrutiny, and others have said the same. Pretending it doesn't exist, or just "trusting" the Morses, is just plain foolish in my book.

[janmcn]

You don't have to deal with it, and frankly I don't want to think about it either. But what really bugs me is when people bury their head in the sand, and act like nothing is wrong, or spout some vitriol at those who are concerned. It has the potential for negative consequences to the residents, so to pretend nothing is wrong, seems like a real cop out to me. Sorry if that offends anyone, but we are all entitled to our opinions. Anything that might affect my lifestyle, or pocketbook, is going to get my scrutiny, and others have said the same. Pretending it doesn't exist, or just "trusting" the Morses, is just plain foolish in my book.


Well said, and it's important for prospective buyers to learn all they can about this investigation by doing a search on this forum or by doing a google search; IRS vs The Villages.

People have to do their own research. They won't hear anything about this from their salesperson or read about it in The Daily Sun.

[Bizdoc]

My educated guess is that this will drag on thru years and years of appeals. Then once it is decided, if it goes against the district, whatever law firm wrote the opinion letter for the bond package will have at it with their insurance company. I suspect that most of us will be feeding worms before it is *finally* settled.

[BobnBev]

93% of the time the feds win! the odds are not good for us! as long as morris is on our side with us paying the bill,,, this will just linger on, till the feds get more millions out us! thank u morris family! we luv paying ur bills!

I thought MORRIS was a cat. Who is this "Morris" family of which you speak?

:ohdear::ohdear:

[mickey100]

I thought MORRIS was a cat. Who is this "Morris" family of which you speak?

:ohdear::ohdear:

It's a common mistake. I've heard people refer to Morris Boulevard as well.

[Bogie Shooter]

It's a common mistake. I've heard people refer to Morris Boulevard as well.

By people who live here???

[Big O]

You don't have to deal with it, and frankly I don't want to think about it either. But what really bugs me is when people bury their head in the sand, and act like nothing is wrong, or spout some vitriol at those who are concerned. It has the potential for negative consequences to the residents, so to pretend nothing is wrong, seems like a real cop out to me. Sorry if that offends anyone, but we are all entitled to our opinions. Anything that might affect my lifestyle, or pocketbook, is going to get my scrutiny, and others have said the same. Pretending it doesn't exist, or just "trusting" the Morses, is just plain foolish in my book.

What bugs me are people who worry about things they absolutely cannot control. I bought here a year and a half ago and knew about this situation and chose to go ahead anyway. Some may be in a different situation and bought before there was a problem. In any event, we have no control over it.

[Indydealmaker]

Well said, and it's important for prospective buyers to learn all they can about this investigation by doing a search on this forum or by doing a google search; IRS vs The Villages.

People have to do their own research. They won't hear anything about this from their salesperson or read about it in The Daily Sun.

Researching this forum would be a huge mistake. There has been nothing but speculation. No data. Nor can there be. This is a case with zero precedent.

[mickey100]

By people who live here???

Yes!

[Moderator]

Let's get back on topic or the thread will be closed.

[Mr.Kris]

OK. Back on point.

No data. Nor can there be. This is a case with zero precedent.

Not true. There is a ton of data here Village Community Development Districts (http://districtgov.org/IRSupdate.aspx) Also, you may want to read Chp 190 of the Florida Statutes concerning the operation of CDDs.

The facts and figures are not in dispute. That was settled through the TAM process.

The issue is the application of law, regulation, and case history (precedent).

The VCCDD may eventually win, but it is clearly at a disadvantage considering the IRS/Treasury assisted in writing the laws, wrote/implemented the regulations, and participated in the case history.

Read the background and you can form your own opinion as I have.

[Bogie Shooter]

Let's get back on topic or the thread will be closed.

Now is the time........................

[mickey100]

Well, gee. Being investigator, prosecutor, grand jury and judge, I guess you could wrap this all up by tomorrow, for free!

Maybe even land a Supreme Court appointment as compensation later!

I just love the snarky posts like this one , not. Luckily posters like this are in the minority. It really gives TOTV a bad name.

[ohiogolf]

Maybe the sink holes are caused by IRS moles undermining the District's legal position...

I thought they were caused by snowbirds like me. We are known to cause most of the problems in TV.

[Indydealmaker]

OK. Back on point.



Not true. There is a ton of data here Village Community Development Districts (http://districtgov.org/IRSupdate.aspx) Also, you may want to read Chp 190 of the Florida Statutes concerning the operation of CDDs.

The facts and figures are not in dispute. That was settled through the TAM process.

The issue is the application of law, regulation, and case history (precedent).

The VCCDD may eventually win, but it is clearly at a disadvantage considering the IRS/Treasury assisted in writing the laws, wrote/implemented the regulations, and participated in the case history.

Read the background and you can form your own opinion as I have.

To the best of my knowledge the IRS has never sued a CDD in Florida based upon this interpretation of their statute. That is what at issue here. Virtually, just an opinion. If it was just you and I, we would agree to disagree and go our own way, but the IRS is the 700 pound gorilla and they just won't compromise.

It would be interesting to see if the IRS targeting scandal will come into play on this since Morse is a well known conservative.

Worst case scenario is less than $5,000/house. Big dent in my Johnnie Walk Black budget!

[TVMayor]

To the best of my knowledge the IRS has never sued a CDD in Florida based upon this interpretation of their statute. That is what at issue here. Virtually, just an opinion. If it was just you and I, we would agree to disagree and go our own way, but the IRS is the 700 pound gorilla and they just won't compromise.

It would be interesting to see if the IRS targeting scandal will come into play on this since Morse is a well known conservative.

Worst case scenario is less than $5,000/house. Big dent in my Johnnie Walk Black budget!
Worst case scenario is less than $5,000/house.
I don’t think so. The IRS is not after me/you or the developer. The IRS is after the CDD. It is my understanding the amity fees are caped at $155/mo. The CDD may have to take money from the flower fund or sell a golf course. The way I see it, it is not my problem. If the IRS seizes the golf course and sells it and a trailer park is built on the golf course my property value would be my problem. However I would not loose my house because I could not pay the $5,000.

Can I have an amen.

[mulligan]

FYI, the CDD's don't own the golf courses or any other amenities. My view is the IRS would penalize those who benefited from the sale and ownership of tax free bonds. That's not me.

[TVMayor]

FYI, the CDD's don't own the golf courses or any other amenities. My view is the IRS would penalize those who benefited from the sale and ownership of tax free bonds. That's not me.
If memory serves me correctly the CDD sold tax free bonds to buy the amenities from the developer, if that is not the case what did they use the money for?

[ilovetv]

The most understandable explanation of it for homeowners is this, in the April, 2009 POA Bulletin:

".....Any debt incurred to purchase common property from the developer is being paid off in an orderly manner as a part of our monthly amenity fees.

Second, the monthly amenity fee cannot be increased to an unreasonably high number because the amenity fee increase is capped at the increase in the Consumer Price Index in the previous 12 months on an individual basis.

Third, the Center Districts cannot impose any taxes or assessment on residents, because the Chapter 190 law that regulates Community Development Districts (CDDs) does not authorize any CDD to assess or tax anyone outside its geographic boundaries.

On Page 2-3:


"......Rich Lambrecht (AAC Chairman) - “On the IRS issue? I guess that the most important thing is that residents are probably very scared having read the article in the Or- lando Sentinel about the $18,000 per person we are going to owe and it just doesn’t jibe with the facts about how the government is set up.

The Center District has two abilities to raise money - the one is amenity fees which are contractual and can only be increased by the CPI, which Janet has told me is not going up very much in the next few months, so your amenity fee is going to be what it is irrespective of anything else going on.

The second point is that the Center District has no ability to tax anyone other than those landowners in the Village Center geographical area so there is no ability to collect $18,000 or any [amount] from residents.”

http://www.poa4us.org/bulletins_files/bulletin200904.pdf

[TVMayor]

FYI, the CDD's don't own the golf courses or any other amenities. My view is the IRS would penalize those who benefited from the sale and ownership of tax free bonds. That's not me.

From the Orlando Sentinel
May 31, 2009

In part it says…….

In the revenue agent's May 18 letter, he urged the districts to take a dramatic and enormously costly step: recall and pay off $355 million worth of outstanding tax-free bonds that paid Morse for everything from golf courses to swimming pools, utility plants to guard houses.


Leisureville USA: The BIG OUCH! -- Explained by Lauren Ritchie (http://andrewblechman.blogspot.com/2009/06/big-ouch-explained-by-lauren-ritchie.html)

[TVMayor]

From the Orlando Sentinel
April 29, 2009

I think the IRS no longer says Morse was overpaid but what he sold to the district is stated in the article.

In part it says…….

The district grossly overpaid Morse by $53 million, according to the IRS. The tangible assets, such as pools, golf courses, mail facilities, golf-ball washers and guardhouses, were worth about $6.9 million. Appraisers the Village district chose weren't qualified under IRS rules, partly because they weren't independent, and they failed to calculate correctly the value of the items purchased, Servadio contended.

Leisureville USA: Big Trouble in The Villages (Part 2) (http://andrewblechman.blogspot.com/2009/04/big-trouble-in-villages-part-2.html)

[Bogie Shooter]

From the Orlando Sentinel
May 31, 2009

In part it says…….



Leisureville USA: The BIG OUCH! -- Explained by Lauren Ritchie (http://andrewblechman.blogspot.com/2009/06/big-ouch-explained-by-lauren-ritchie.html)

You are using Lauren Ritchie as a source of factual information.............this could be a mistake? She makes things up as she goes. And The Villages is her whipping boy......................

[TVMayor]

You are using Lauren Ritchie as a source of factual information.............this could be a mistake? She makes things up as she goes. And The Villages is her whipping boy......................

Mulligan said, “FYI, the CDD's don't own the golf courses or any other amenities.”

I said, “If memory serves me correctly the CDD sold tax free bonds to buy the amenities from the developer, if that is not the case what did they use the money for?”

What was the money used for B Shooter?

Do we need to look at some pdf files? Should we get sinkhole man on this?

You don’t like Lauren Ritchie, how about Michael C. Bender for the Bloomberg News?

In part…….

Under Florida's community-development district arrangement, Morse built amenities in The Villages -- primarily golf courses, pools and guard houses -- and then sold them to residents through district boards that decided how much to pay for the assets. The boards were appointed by Morse, as state law allows, and in every case the majority of the members worked for Morse; one board included Morse, according to Bloomberg's analysis.

Villages CDD bonds ruled taxable | HeraldTribune.com (http://www.heraldtribune.com/article/20130607/ARTICLE/306079989/-1/news?p=1&tc=pg)

[TVMayor]

On 6/27/1996 Village Center Community Development District purchased From Villages of Lake Sumter inc AKA “the developer” Tierra Del Sol golf course For $5,000,000.

Information from Sumter County.

Amen

[janmcn]

It will get very interesting when the developer starts selling off all the amenities south of 466, as this will involve tens (perhaps hundreds) of millions of dollars. Hopefully, both parties (Morse and CDD) have learned from their mistakes and won't use tax-free bonds to finance them.

It was reported on another thread that Morse won't transfer these assets until the IRS investigation ends. Who knows if that's true or not.

[Bogie Shooter]

It will get very interesting when the developer starts selling off all the amenities south of 466, as this will involve tens (perhaps hundreds) of millions of dollars. Hopefully, both parties (Morse and CDD) have learned from their mistakes and won't use tax-free bonds to finance them.

It was reported on another thread that Morse won't transfer these assets until the IRS investigation ends. Who knows if that's true or not.

How could you tell? From posts on TOTV the Developer always lies!

[Bogie Shooter]

Let's get back on topic or the thread will be closed.

This post needs to be revisited........................

[Steve9930]

It will get very interesting when the developer starts selling off all the amenities south of 466, as this will involve tens (perhaps hundreds) of millions of dollars. Hopefully, both parties (Morse and CDD) have learned from their mistakes and won't use tax-free bonds to finance them.

It was reported on another thread that Morse won't transfer these assets until the IRS investigation ends. Who knows if that's true or not.

I believe the tax free bonds were issued to fund the infrastructure, roads, sewers, etc.

[Steve9930]

To the best of my knowledge the IRS has never sued a CDD in Florida based upon this interpretation of their statute. That is what at issue here. Virtually, just an opinion. If it was just you and I, we would agree to disagree and go our own way, but the IRS is the 700 pound gorilla and they just won't compromise.

It would be interesting to see if the IRS targeting scandal will come into play on this since Morse is a well known conservative.

Worst case scenario is less than $5,000/house. Big dent in my Johnnie Walk Black budget!

I doubt anything big will ever come from this issue. Its been in litigation for a long time and Morse has enough lawyers to keep this going forever. The IRS argument is that the Developer did not follow the regulation as to how you structure the CDD to allow you to issue Tax Free Bonds. The developer benefitted directly from the running of the CDD. This is how I understand the problem. What that means in relationship to the bonds and the fines that may follows who knows.

[TVMayor]

I believe the tax free bonds were issued to fund the infrastructure, roads, sewers, etc.
That's a different bond.

[Mikeod]

To my knowledge, the golf courses included in the amenities purchased by the VCCDD were the executive courses, not the championship courses which are not part of the resident amenities.

I'm curious about the information that the VCCDD bought Tierra Del Sol golf course. It could be that it is owned by the central district as a district asset but not a resident amenity. Strange, since I was told the developer owned all those courses.

There was an article in the POA newsletter about a year ago that showed how the developer's take from sale of the amenities south of 466 was markedly different depending on whether the sale was with tax-free or taxable bonds even at the same sale price. The article asserted that the sale would not occur until the IRS issue was settled.

[mulligan]

I believe the tax free bonds were issued to fund the infrastructure, roads, sewers, etc.

Bonds for infrastructure which you see on your property tax bill are issued as each district is built. These are the cdd's The district that purchased the amenities (priced correctly or not) is the VCCDD which has no residences in it's area of responsibility, only commercial property. The CDD"S are 100% residential areas.

[Steve9930]

Bonds for infrastructure which you see on your property tax bill are issued as each district is built. These are the cdd's The district that purchased the amenities (priced correctly or not) is the VCCDD which has no residences in it's area of responsibility, only commercial property. The CDD"S are 100% residential areas.

So which bond is on the tax bill, the ones for the infrastructure? Then which bond is the IRS questioning?

[golf2140]

On 6/27/1996 Village Center Community Development District purchased From Villages of Lake Sumter inc AKA “the developer” Tierra Del Sol golf course For $5,000,000.

Information from Sumter County.

Amen

Your info is 18 years old. Why post, Get a new torch to burn.

[Bogie Shooter]

So which bond is on the tax bill, the ones for the infrastructure? Then which bond is the IRS questioning?

This is on your tax bill.
What is the Bond Debt Assessment for?

The bond debt assessment reflects each lot’s proportionate share of the cost of building the infrastructure within its District or for which its District has responsibility. It is the most equitable method of distributing costs between the properties that benefit from the infrastructure. Infrastructure includes storm water systems, underground pump stations, water retention areas, curbs, gutters, streetlights, transportation trails, underground piping, etc.

Go here to read all about the IRS Bond Issue.

http://www.districtgov.org/IRSupdate.aspx

[TVMayor]

Your info is 18 years old. Why post, Get a new torch to burn.
Because what somebody said did not happen happened 18 years ago. Does that clear things up for you?

[ilovetv]

From our DistrictGov.org website:

Village Center Community Development District (VCCDD) was created by Ordinance No.92-06 of the Lady Lake Town Commissioners under authority of Chapter 190, Florida Statutes, and is comprised of 166.82 acres of land within Lady Lake in Lake County, Florida. The District is comprised of commercial properties owned by The Villages of Lake-Sumter, Incorporated, and various other commercial entities.

Maintenance of the infrastructure is provided through an annual assessment to property owners based upon square footage of properties benefited. The assessment programs are managed through the Village Center District Accounting Department, and may be collected on the Lake County tax bill, by agreement with the Lake County Tax Collector, utilizing the uniform method of assessment adopted by the Board of Supervisors.

Governance of the Village Center Community Development District is accomplished by a five member Board of Supervisors, elected biannually, as described in Chapter 190.006, Florida Statutes. Inasmuch as there are no residential properties contained within the boundaries of the Village Center Community Development District, members of the Board of Supervisors will continue to be elected by the landowners of property within the boundaries of the District.

Among the services provided by Village Center Community Development District to residential properties within The Villages are security, fire and emergency medical first response (non-transport) services, recreational facilities and services, stormwater collection and distribution and treated effluent distribution, and executive golf. These services are paid for through the receipt of monthly contractual amenity fees paid by each residential property within the service area of the District, as described by the Declaration of Covenants and Restrictions applying to each residential property. Certain services provided are paid for through user fees.

If you have more questions, the District conducts informational sessions each week that are open to anyone wishing to attend.

Village Community Development Districts (http://www.districtgov.org/yourdistrict/front.aspx?district=vc)

[Mr.Kris]

So which bond is on the tax bill, the ones for the infrastructure? Then which bond is the IRS questioning?

The bonds on the tax bill are for infrastructure - roads, sewers, etc.

The bonds for the rec facilities are financed (serviced) through the amenity fees.

[Mr.Kris]

So which bond is on the tax bill, the ones for the infrastructure? Then which bond is the IRS questioning?

The bonds on the tax bill are for infrastructure - roads, sewers, etc.

The bonds for the rec facilities are financed (serviced) through the amenity fees.

The IRS is questioning the bonds for the rec facilities stating that they are "arbitrage" bonds.

[Steve9930]

This is on your tax bill.
What is the Bond Debt Assessment for?

The bond debt assessment reflects each lot’s proportionate share of the cost of building the infrastructure within its District or for which its District has responsibility. It is the most equitable method of distributing costs between the properties that benefit from the infrastructure. Infrastructure includes storm water systems, underground pump stations, water retention areas, curbs, gutters, streetlights, transportation trails, underground piping, etc.

Go here to read all about the IRS Bond Issue.

Village Community Development Districts (http://www.districtgov.org/IRSupdate.aspx)

Thanks for the link.

[Steve9930]

The bonds on the tax bill are for infrastructure - roads, sewers, etc.

The bonds for the rec facilities are financed (serviced) through the amenity fees.

The IRS is questioning the bonds for the rec facilities stating that they are "arbitrage" bonds.


Definition of 'Arbitrage Bond'


A debt security with a lower interest rate issued by a municipality prior to the call date of the municipality's existing higher-rate security. Proceeds from the issuance of the lower-rate bonds are invested in treasuries until the call date of the higher-interest bonds.

Arbitrage bonds are used by municipalities when they wish to arbitrage the difference between current lower interest rates and bonds that they may have issued at higher coupon rates in the past. This strategy, which enables them to reduce the net effective cost of their borrowings, is particularly effective when interest rates and bond yields are declining.


Investopedia Says
Investopedia explains 'Arbitrage Bond'


The chief attraction of municipal bonds is their tax exemption feature. Arbitrage bonds may qualify for a temporary tax exemption as long as the proceeds from net sales and investments are to be used in future projects. If, however, the project experiences a significant delay or cancellation, the municipality may be taxed.


I have way too much time on my hands......

[8notes]

Definition of 'Arbitrage Bond'


A debt security with a lower interest rate issued by a municipality prior to the call date of the municipality's existing higher-rate security. Proceeds from the issuance of the lower-rate bonds are invested in treasuries until the call date of the higher-interest bonds.

Arbitrage bonds are used by municipalities when they wish to arbitrage the difference between current lower interest rates and bonds that they may have issued at higher coupon rates in the past. This strategy, which enables them to reduce the net effective cost of their borrowings, is particularly effective when interest rates and bond yields are declining.


Investopedia Says
Investopedia explains 'Arbitrage Bond'


The chief attraction of municipal bonds is their tax exemption feature. Arbitrage bonds may qualify for a temporary tax exemption as long as the proceeds from net sales and investments are to be used in future projects. If, however, the project experiences a significant delay or cancellation, the municipality may be taxed.


I have way too much time on my hands......

Thank you. I had no idea what this bond was.

[Steve9930]

So based on the link provided and after several cups of coffee to read through the Lawyerieezee. Here's the bottom line:

Between 1993 and 2004 Morse via the district issued $426 Million in what were supposed to be Tax Free Bonds. Lots of owners of the bonds.

The IRS says that Mr. Morse, clan, and friends were in total control and manipulated the district so as to stay in total control of the development. Something the IRS says is not how it should work. Because of this the IRS says NO NO on the tax free part and taxes should have been paid and they want their money.

The district says no we do not owe you taxes and we want relief under some lawyereezze section of the IRS code.

The IRS says that's not correct make your argument and we will pass it up the food chain for a decision.

I want to be one of the lawyers as they are getting super rich spending tax dollars and a billionaires dollars in fees.

So bottom line the district will be given relief or some one is going to pay the taxes on the interest paid from 1993 to 2004 for $426 Million in bonds.

I'm going back to my Jack and Coke my head hurts......

[Steve9930]

Gary should have never had George over for diner! That's were it went wrong.

[janmcn]

So based on the link provided and after several cups of coffee to read through the Lawyerieezee. Here's the bottom line:

Between 1993 and 2004 Morse via the district issued $426 Million in what were supposed to be Tax Free Bonds. Lots of owners of the bonds.

The IRS says that Mr. Morse, clan, and friends were in total control and manipulated the district so as to stay in total control of the development. Something the IRS says is not how it should work. Because of this the IRS says NO NO on the tax free part and taxes should have been paid and they want their money.

The district says no we do not owe you taxes and we want relief under some lawyereezze section of the IRS code.

The IRS says that's not correct make your argument and we will pass it up the food chain for a decision.

I want to be one of the lawyers as they are getting super rich spending tax dollars and a billionaires dollars in fees.

So bottom line the district will be given relief or some one is going to pay the taxes on the interest paid from 1993 to 2004 for $426 Million in bonds.

I'm going back to my Jack and Coke my head hurts......



You have everything correct except one thing. It's not the "billionaires dollars in fees", it's the district that has paid the attorney close to one million dollars in fees.

[Steve9930]

You have everything correct except one thing. It's not the "billionaires dollars in fees", it's the district that has paid the attorney close to one million dollars in fees.

That's a very nice chunk of change. I'll bet they all have new cars......!