IRS vs VCDD Bonds

[wdwduo]

Today's (Sunday) Orlando Sentinel has a rather scathing column by Lauren Ritchie about the preliminary IRS ruling on the tax exempt status of $64 million of VCDD bonds. The column is factually correct except that it littered with snarky comments about lawyers, the Villages Government and the Developer. Straightforward reporting would be of more benefit to us that Ms. Ritchie's hatchet job. Her comments detract from this important issue, which poses the potential for significant economic impact for Village homeowners should the IRS ruling stand. There appears to be a follow-up column scheduled for Wednesday. This is an issue that we need to keep an eye on, though a less slanted source of information may be desirable.
LED

[carole131]

In today's Orlando Sentinel, Lauren Ritchie writes that for the past year, the IRS has been investigating $64 million worth of tax-free bonds sold in 2003 by the VCCDD & concluded that they should be taxed. This is of interest to all residents. I recommend that we all follow this closely.

The article appears in Section J, Page one.

[JimJoe]

In today's Orlando Sentinel, Lauren Ritchie writes that for the past year, the IRS has been investigating $64 million worth of tax-free bonds sold in 2003 by the VCCDD & concluded that they should be taxed. This is of interest to all residents. I recommend that we all follow this closely.

The article appears in Section J, Page one.

Here it the link to the article

http://www.orlandosentinel.com/news/local/lake/orl-lklritchie01030109mar01,0,925697.story

[bimmertl]

The IRS report sounds very similar to what the POA has been saying for a long time.

http://www.poa4us.org/issues.html

[ouma1938]

:agree: wdwduo is right when he says that the reporting was snarky. It was so obviously biased. As I call the reporter is not a friend of TV and has written other articles that were also very biased. Hopefully she (who whoever writes the follow-up on Wednesday) will be a little less biased and we can get the facts without the hype. While still a TV wannabee we are determined to change that status as soon as we can and we need the facts in straightforward honest reporting. As do all residents and wannabees.

[Taj44]

I'm concerned about what this means to us residents if the IRS ruling stands. Does anyone have a good handle on that?

[zcaveman]

I read the article twice. I did not see anything "scathing". I thought t was a well written article that discussed tie IRS and the Villages understanding of the way bonds are allocated and used in the Villages.

Doesn't it concern any of you that they build a recreation center for $1M and sell it back to us for $10M?

These tactics have been written up in the POA newsletter and in previous articles in the Orlando Sentinel. If you take time to read it and the Richie article instead of being defensive, you might even ask yourself - is this true? Remember this is our money they are spending.

[Taj44]

Sure looks like the Developer taking advantage of us. I have no problem with them making a profit, but not to the extent of unscrupulously ripping us off.

[Niels]

"Doesn't it concern any of you that they build a recreation center for $1M and sell it back to us for $10M?"

Zcaveman,
I don't currently live in TV but I am actively considering moving there someday. Yes, it does concern me. In fact that is why I made sure I attended the 2 hour CDD orientation when I was visiting there on the lifestyle preview plan. I wanted to get a clearer idea of what was occurring and listen to their explanation.

While the class was informative, it still left me with serious concerns about the fairness of what was going on and the huge amount of debt being incurred that village residents need to pay off. Even if you accept the method used to appraise the property, I was not convinced that the appraiser was totally independent.

By paying $64 million for $11 million in assets, the developer is reaping a ridiculous amount of profit. And since he has a guaranteed buyer, it would seem like he has virtually no risk. As an investor, I would love to find an investment like this that I could invest in.

Don't get me wrong, I like TV. In fact, I plan on taking a second lifestyle visit later this year. However, this issue does bother me and I would think it should bother all TV residents.

[Cassie325]

1. Don't you think the Developer is not only selling a building or business as it is at the time of sale....but for the potential/possible/probable future value. Smart!

2. We didn't have to buy it. It was a choice.

Just my thoughts.

[zcaveman]

1. Don't you think the Developer is not only selling a building or business as it is at the time of sale....but for the potential/possible/probable future value. Smart!

2. We didn't have to buy it. It was a choice.

Just my thoughts.


We have no choice. Yhe deal is between the developer and the developer owned committee.

Did you NOT read the article?

[Cassie325]

I read the article. It seems similar to one she wrote several months ago and does not seem to have any new information.

I think it would be best if everyone waited until March 25th to see what Janet Tutt has to say in the VCCDD's response to the IRS questions.

[serenityseeker]

Is it to early to speculate or is there some general idea of how this may affect residents?

[Muncle]

Today's (Sunday) Orlando Sentinel has a rather scathing column by Lauren Ritchie about the preliminary IRS ruling on the tax exempt status of $64 million of VCDD bonds. The column is factually correct except that it littered with snarky comments about lawyers, the Villages Government and the Developer. Straightforward reporting would be of more benefit to us that Ms. Ritchie's hatchet job. Her comments detract from this important issue, which poses the potential for significant economic impact for Village homeowners should the IRS ruling stand. There appears to be a follow-up column scheduled for Wednesday. This is an issue that we need to keep an eye on, though a less slanted source of information may be desirable.
LED

I really hate it when people denigrate information because of the source. When people use such snarky (if I can steal a good word) terms as "faux news", it just tells me they never watch it and are dealing from ignorance. Unfortunately, my distaste with this habit hasn't inoculated me from it. I still question anything coming from MSNBC as I consider it an arm of the DNC.

While I have read quite a few of Ritchie's columns and found many informative, I've noted that she is absolutely incapable of writing about TV in an unbiased manner. If she ever includes comments from Villages residents, it is ALWAYS from the POA. I swear if the Morse family were to discover a cure for cancer, Ritchie would chastise them for putting doctors out of work. Ms Ritchie seems to have attended the same journalistic integrity classes as Andy Bleatchman.

Re the IRS/bond issue in general and how it affects residents, I don't believe the article tells us anything. Like any case involving this much money, this is not going to be resolved quickly. And as any permanent IRS ruling will affect all the CDD eventually, the lawyers are going to be running up the billables on this one. Pretty sure I'll be dead before this is completely settled.




`

[Bobbie2836]

I agree with Cassie - it was a choice to live here. It still is my choice. If I didn't like it here, didn't want to live here, I'd leave here.

As I understand it, the IRS investigation has more to do with how the bonds are treated with regard to taxing... tax-free (as Muni bonds are) or not tax-free.

Its not MY call to make. Also, no matter what the decision is, it won't affect my tax returns.

[Cassie325]

I agree with Cassie - it was a choice to live here. It still is my choice. If I didn't like it here, didn't want to live here, I'd leave here.

As I understand it, the IRS investigation has more to do with how the bonds are treated with regard to taxing... tax-free (as Muni bonds are) or not tax-free.

Its not MY call to make. Also, no matter what the decision is, it won't affect my tax returns.

Thanks Bobbie! However, I think I may have been mis-understood with the comment about buying was our choice.

I did indeed mean that it is our choice to buy a home in TV's....where there are Amenity Fees, Trash and water charges even if we are not full time residents. We were also told about the CDD and Bond's prior to buying a home here. We were told everything...whether we remember, absorb, listen or retain that information.

I do not think we have much to worry about in regards to the bonds and taxes. I could be wrong. Just a guess.

[djl8412]

It appears that many are taking shots at the reporter, news media, etc. instead of focussing on the contents of the article. Whether or not the writer is "snarky" or not about The Villages CDD or Mr. Morse is not germane. What every resident should focus on is whether you are getting a fair shake or are being shaken. Of course we are all here by choice, just as we left our former homes by choice and we love the lifestyle of The Villages. However, if we are responsible enough to pay our individual taxes and debts then so should those who are in positions of influencing our lifestyle here. That means not taking unfair advantage of a more senior population you are betting on not to try to peel off the seemingly many layers of how The Villages is governed. When I attended the CDD orientation last summer, it was easy to understand why they suggest you attend more than once or twice. When my wife previously inquired as to how bonds and amenity fees are calculated and their history......she really couldn't get an answer short of double-talk from real estate people. That tends to cause one to raise red flags. I dare say that all these issues are complicated by design and they indeed do lead to job security for attorneys.

By the way, has anyone ever seen any in-depth articles about the IRS investigation in The Villages Daily Sun or on WVLG? I didn't think so. I wonder why?

[Captfrog]

In depth articles on the IRS vs TV in the "Good News Daily" or on the "Good News Radio Station...............don't hold your breath--especially when it's negative to the Morse family.

By the way, Lauren Ritchie is a columnist--not a reporter. She makes her living expressing her opinion. It's only "snarky" if you don't agree with it.

[Muncle]

In depth articles on the IRS vs TV in the "Good News Daily" or on the "Good News Radio Station...............don't hold your breath--especially when it's negative to the Morse family.

By the way, Lauren Ritchie is a columnist--not a reporter. She makes her living expressing her opinion. It's only "snarky" if you don't agree with it.


That's brilliant, and it took you only 4 + months to come up with those insightful comments TV media group and Ms Ritchie. :bowdown:

[chuckster]

:agree: Obviously a non resident and friend of Ms. Ritchie stirring the pot for personal reasons. :beer3:

[GatbTester]

The developer has ONE mission, to make as much money from his investments as possible; we as residents have ONE mission, to pay as much as the developer wants so that his greedy lifestyle can continue.

[jjdees]

I can't believe people move to to TV and enjoy what has been built, unlike any other place in the country, and then call the developer greedy. It's a business Gat. If you don't make a profit (today called greed) the business closes. Simple. And what do you know about this greedy lifestyle you mentioned? Would you be happier if the developer closed up and moved on?

[sandybill2]

I can't believe people move to to TV and enjoy what has been built, unlike any other place in the country, and then call the developer greedy. It's a business Gat. If you don't make a profit (today called greed) the business closes. Simple. And what do you know about this greedy lifestyle you mentioned? Would you be happier if the developer closed up and moved on?

:agree::agree::agree: I didn't work for "free" when I was employed. I asked for raises and tried to make as much money as I could while I was in the workforce.

[k2at]

This question has been asked a few times, but no one has answered it.

The question is if the IRS ruling stands, what is the impact on us, the residents? Similiarly, if IRS is wrong in their interpretation, what is the impact on us.

Please someone, answer this question.

[SteveZ]

This question has been asked a few times, but no one has answered it.

The question is if the IRS ruling stands, what is the impact on us, the residents? Similiarly, if IRS is wrong in their interpretation, what is the impact on us.

Please someone, answer this question.
There's a lot of legal wrangling ahead, as a lot of other CDDs other than TV's have a stake in this.

We can guess about the potential outcome until the cows come home and leave again. Just as there is "what's legally right," there's some face-saving that will have to be factored into the equation.

Since the answer is like throwing a dart at a 360-degree target while blindfolded, any answer will be right and wrong.

[Muncle]

This question has been asked a few times, but no one has answered it.

The question is if the IRS ruling stands, what is the impact on us, the residents? Similiarly, if IRS is wrong in their interpretation, what is the impact on us.

Please someone, answer this question.
\
I'm not going to criticize or comment that your question has been addressed in a variety of ways both in other TOTV threads and published Janet Tutt comments that are available on the CDD web site. It's been drilled into me that one must be patient and polite.

So, I'm going to try to answer your questions as best I can, and I'm going to type r_ e_ a_ l___ s_ l_ o_ w_ l_ y_ just in case. The general answer is that no one knows exactly. No one knows how far the IRS is willing to take the case or whether they will attempt to include other "defendants".

So we go to suppositions: What if the IRS prevail, even though we are not sure what the final complaint will be? Firstly, the complaint is against the issuer of the tax-exempt bonds, the Village Center Community Development District. It is not only not against the individual homeowner, it is not against the numbered districts. The IRS can take nothing from you, can fine you nothing. Secondly, what can the VCCDD do if ruled against. Again, there are a plethora of solutions available to them, none overly pretty. Though I'm certainly not a financial expert, the one mentioned a couple times and seemingly most appealing would be to call the existing tax-free bonds and substitute non-tax-free bonds in their place. Not knowing the rate on the tax-frees or the going rate for bonds today, I've no idea what kind of financial hit that would entail, if any. As to the fear propagated by some that the VCCDD would somehow pass any cost on down to the homeowners, posters much more knowledgeable than I have assured us that this is strictly prohibited by law.

So, in answer to your first supposition, "if the IRS ruling stands, what is the impact on us, the residents?", no one can answer that now nor likely in the near future. The indication is that there will be minimal if any impact on homeowners.

So we come to supposition # 2, "if IRS is wrong in their interpretation, what is the impact on us." I'm a bit lost here as to why there would be any impact whatsoever. The only thing I can imagine would be if the VCCDD was so happy to have the monkey off their back that they would host a huge party at Spanish Springs or the Polo Field, ideally with Lauren Ritchie as Guest of Honor and Queen of the Festivities.



`

[The Gray Hog]

Are we so big......that we could have the gov. take over the
rec. ctrs and golf courses?
How about a bankrupt situation where all debt is 'forgiven' and
we reopen the next day? Yeh, kinda like that one.

[The Shadow]

\
I'm not going to criticize or comment that your question has been addressed in a variety of ways both in other TOTV threads and published Janet Tutt comments that are available on the CDD web site. It's been drilled into me that one must be patient and polite.

So, I'm going to try to answer your questions as best I can, and I'm going to type r_ e_ a_ l___ s_ l_ o_ w_ l_ y_ just in case. The general answer is that no one knows exactly. No one knows how far the IRS is willing to take the case or whether they will attempt to include other "defendants".

So we go to suppositions: What if the IRS prevail, even though we are not sure what the final complaint will be? Firstly, the complaint is against the issuer of the tax-exempt bonds, the Village Center Community Development District. It is not only not against the individual homeowner, it is not against the numbered districts. The IRS can take nothing from you, can fine you nothing. Secondly, what can the VCCDD do if ruled against. Again, there are a plethora of solutions available to them, none overly pretty. Though I'm certainly not a financial expert, the one mentioned a couple times and seemingly most appealing would be to call the existing tax-free bonds and substitute non-tax-free bonds in their place. Not knowing the rate on the tax-frees or the going rate for bonds today, I've no idea what kind of financial hit that would entail, if any. As to the fear propagated by some that the VCCDD would somehow pass any cost on down to the homeowners, posters much more knowledgeable than I have assured us that this is strictly prohibited by law.

So, in answer to your first supposition, "if the IRS ruling stands, what is the impact on us, the residents?", no one can answer that now nor likely in the near future. The indication is that there will be minimal if any impact on homeowners.

So we come to supposition # 2, "if IRS is wrong in their interpretation, what is the impact on us." I'm a bit lost here as to why there would be any impact whatsoever. The only thing I can imagine would be if the VCCDD was so happy to have the monkey off their back that they would host a huge party at Spanish Springs or the Polo Field, ideally with Lauren Ritchie as Guest of Honor and Queen of the Festivities.



`

I'm going to type r_ e_ a_ l___ s_ l_ o_ w_ l_ y_ just in case.

So we come to supposition # 3,
You did not say anything about the forfeiture of property or the Village Center Community Development District filing for bankruptcy and having to sell off property? GMC, AIG?

[Muncle]

I'm going to type r_ e_ a_ l___ s_ l_ o_ w_ l_ y_ just in case.

So we come to supposition # 3,
You did not say anything about the forfeiture of property or the Village Center Community Development District filing for bankruptcy and having to sell off property? GMC, AIG?

Okay, back to normal typing --- do you know anything about this? Do you know the pertinent IRS guidelines on the matter or case history of similar situations? Do you know what Florida Statutes Chapter 190 would have to say on the issue and what the case history in Circuit and Supreme Courts would be given a conflict between state law and the IRS? Do you know the financial situation of the VCCDD that would cause it to go into bankruptcy because of an unknown IRS finding?

I also did not comment of a meteor striking Spanish Springs or a giant gator invading a district meeting and eating all the directors. Based on available facts in this case, either is just as probable to happen as your scenario.

No one, not the IRS, not the VCCDD and it's lawyers, not Janet Tutt and TV management, not the Developer or his whole family, not even Lauren Ritchie or the POA can tell you what is going to happen.


NO ONE KNOWS ! ! !

[k2at]

Why does not the VCCDD just apply for part of the stimulus package, accept the IRS determination, pay off the interest on the bonds and then throw a party at the Polo grounds with the money left over. Only downside to this is how to spend all the excess monies which the VCCDD would receive from the Feds.

Everyone is then happy!!

[Bogie Shooter]

no one knows ! ! !

[The Shadow]

Okay, back to normal typing --- do you know anything about this? Do you know the pertinent IRS guidelines on the matter or case history of similar situations? Do you know what Florida Statutes Chapter 190 would have to say on the issue and what the case history in Circuit and Supreme Courts would be given a conflict between state law and the IRS? Do you know the financial situation of the VCCDD that would cause it to go into bankruptcy because of an unknown IRS finding?

I also did not comment of a meteor striking Spanish Springs or a giant gator invading a district meeting and eating all the directors. Based on available facts in this case, either is just as probable to happen as your scenario.

No one, not the IRS, not the VCCDD and it's lawyers, not Janet Tutt and TV management, not the Developer or his whole family, not even Lauren Ritchie or the POA can tell you what is going to happen.


NO ONE KNOWS ! ! !

I did not ask you what would happen, I posted supposition #3. :laugh:

[chuckster]

Shadow..........Give me a break...:rant-rave: enough already. We will all know at the same time. If you are that nervous look elsewhere for paradise.:beer3: I've found mine here regardless of the outcome.

[The Gray Hog]

:crap2: Yeh..........lets get some of the 'free monies' for TV.