Trouble in paradise

[GrayGoose]

It seems the IRS is about to declare that the bonds that Morse sold over the years as municipals did not qualify as municipals. IRS has been auditing these instruments for about a year and what it boils down to, by example, is Morse would sell $60M of municipal bonds, use maybe $4m to build something like a rec center or the Savannah Center, and pay off the bonds over time out of homeowner monies. He would then turn around and sell the building (with and assessed value of $6m) back to one of the VCCDDs at $60M, thus netting himself $54m profit. IRS believes this is illegal for a number of reasons (google the Villages municipal bonds). It is believed that IRS is going to try to get him on as much as $271m + interest + penalties. This is a very complex issue but well spelled out in some of the articles you will find on line. The Orlando Sentinel has an investigative reporter doing some articles that are excellent.
IRS ranks participants in circumstances like this from least liable to most liable. In this case the bond purchasers are least liable, the home buyers next, the VCCDDs next, and finally Gary Morse most liable. That means that if the IRS does go after the Villages (and it looks like they are going to) Morse might be destroyed. Unfortunately the VCCDDs have no money but do have taxing power. They would be the next target after Morse so the only way they can get money is to tax homeowners. That tax burden could amount to approximately an $18,000 assessment per household.

[shermark]

Interesting,,,,,,where did you get this info?? I did not see it in the orlando sentinel.

[dillywho]

It seems the IRS is about to declare that the bonds that Morse sold over the years as municipals did not qualify as municipals. IRS has been auditing these instruments for about a year and what it boils down to, by example, is Morse would sell $60M of municipal bonds, use maybe $4m to build something like a rec center or the Savannah Center, and pay off the bonds over time out of homeowner monies. He would then turn around and sell the building (with and assessed value of $6m) back to one of the VCCDDs at $60M, thus netting himself $54m profit. IRS believes this is illegal for a number of reasons (google the Villages municipal bonds). It is believed that IRS is going to try to get him on as much as $271m + interest + penalties. This is a very complex issue but well spelled out in some of the articles you will find on line. The Orlando Sentinel has an investigative reporter doing some articles that are excellent.
IRS ranks participants in circumstances like this from least liable to most liable. In this case the bond purchasers are least liable, the home buyers next, the VCCDDs next, and finally Gary Morse most liable. That means that if the IRS does go after the Villages (and it looks like they are going to) Morse might be destroyed. Unfortunately the VCCDDs have no money but do have taxing power. They would be the next target after Morse so the only way they can get money is to tax homeowners. That tax burden could amount to approximately an $18,000 assessment per household.

I attended the AAC meeting at Savannah this week and this very topic came up. It seems that this is not the first time and the IRS has always found no fault. One of the previous dates I remember from the meeting was in 1999 and I think again in 2003 (not sure about that one). Seems like there is a lot of panic for nothing. Lots of answers to lots of things can be found at these meetings. Check out the AAC for yourselves sometime...very interesting.

[JohnN]

already a long LONG thread on this, including links to the Orlando Sentinel article on this board.. just fyi


The Villages and the IRS. From Lauren Ritchie (Multi-page thread 1 2 3 ... Last Page)

[Muncle]

It seems the IRS is about to declare that the bonds that Morse sold over the years as municipals did not qualify as municipals. IRS has been auditing these instruments for about a year and what it boils down to, by example, is Morse would sell $60M of municipal bonds, use maybe $4m to build something like a rec center or the Savannah Center, and pay off the bonds over time out of homeowner monies. He would then turn around and sell the building (with and assessed value of $6m) back to one of the VCCDDs at $60M, thus netting himself $54m profit. IRS believes this is illegal for a number of reasons (google the Villages municipal bonds). It is believed that IRS is going to try to get him on as much as $271m + interest + penalties. This is a very complex issue but well spelled out in some of the articles you will find on line. The Orlando Sentinel has an investigative reporter doing some articles that are excellent.
IRS ranks participants in circumstances like this from least liable to most liable. In this case the bond purchasers are least liable, the home buyers next, the VCCDDs next, and finally Gary Morse most liable. That means that if the IRS does go after the Villages (and it looks like they are going to) Morse might be destroyed. Unfortunately the VCCDDs have no money but do have taxing power. They would be the next target after Morse so the only way they can get money is to tax homeowners. That tax burden could amount to approximately an $18,000 assessment per household.



Did you hear that Enron's in trouble and some athletes may be on steroids?

Firstly, Ritchie is not an investigative reporter. She is a hack columnist with an obvious Villages and Morse problem.

Secondly, where did you get your information? This issue has been hashed and rehashed thoroughly in TOTV, and many of your statements just don't jive with what has been revealed and discussed.




`

[KayakerNC]

**snip** Seems like there is a lot of panic for nothing. Lots of answers to lots of things can be found at these meetings. Check out the AAC for yourselves sometime...very interesting.

Having survived a couple of company closings in my work career, I've learned that when they tell you; "Don't worry, the newspaper has it all wrong", you had better start to worry cause something is about to hit the fan.
Concern, yes. Panic, no.:beer3:

[Taj44]

Really, where there's smoke there certainly may be fire. I'm concerned but am waiting to hear more facts and see how things seem to go.

[Barefoot]

It seems the IRS is about to declare that the bonds that Morse sold over the years as municipals did not qualify as municipals. Unfortunately the VCCDDs have no money but do have taxing power. They would be the next target after Morse so the only way they can get money is to tax homeowners. That tax burden could amount to approximately an $18,000 assessment per household.

GrayGoose, I see that you list your occupation on your Public TOTV Profile as "trouble maker".

[thegreenerside]

I just wonder if a democratic Washington will lead the way at bringing the empire down. Under the Republicans all was Kosher. Just a thought.

[Halle]

Well he seems to be a Pro at it!

GrayGoose, I see that you list your occupation on your Public TOTV Profile as "trouble maker".

:crap2:

[MelZ]

Kids:

Have no fear the Congress is currently drafting a bill to bail out The Villages.

BO has agreed to sign it into law

[Alex]

Glad this topic came up again. Most do not know what they bought when they bought in the Villages. Morris is not an honest developer. Do your research before you buy.

[Bogie Shooter]

It seems... IRS has been auditing... IRS believes It is believed.... This is a very complex issue Orlando Sentinel has an investigative reporter..... In this case the bond purchasers are least liable, the home buyers next, the VCCDDs next, and finally Gary Morse most liable..... That means.... Morse might be destroyed..... Unfortunately the VCCDDs have no money... way they can get money is to tax homeowners. That tax burden could amount to approximately an $18,000 assessment per household.....

Gray Goose it may be helpful for you to read the long thread already posted. The basic conclusion is that it is way too early to tell what will happen.....maybe chicken little, will be chicken soup by then!

[Russ_Boston]

That tax burden could amount to approximately an $18,000 assessment per household.

Hmmmm - $18,000 times 50,000 households = 900 MILLION dollars to pay off a 28 million dollar debt? This must be real new math!

This topic has been hashed and rehashed many times here on TOTV.

[Cassie325]

Glad this topic came up again. Most do not know what they bought when they bought in the Villages. Morris is not an honest developer. Do your research before you buy.

Alex...I believe most people educate themselves about any community they are buying into....I would think most people on here know what TV's is all about prior to moving here...

[RCT]

Glad this topic came up again. Most do not know what they bought when they bought in the Villages. Morris is not an honest developer. Do your research before you buy. If YOU did your research, you'd know that the name is Morse, not Morris. Seems you're just another person on here that likes to slander without facts. Maybe you should get a job writing for the Orlando paper??? You think if they weren't basically honest developers, they would have been able to build 40,000 homes so far?? Get a grip, man.

[Muncle]

Glad this topic came up again. Most do not know what they bought when they bought in the Villages. Morris is not an honest developer. Do your research before you buy.

Do you have any basis in fact for your spurious allegations? Not you buddy's opinion, facts.

[OutsiderWithInterest]

.

[iaudit]

Hmmmm - $18,000 times 50,000 households = 900 MILLION dollars to pay off a 28 million dollar debt? This must be real new math!

This topic has been hashed and rehashed many times here on TOTV.

Russ

According to Ms. Ritchie's article, the central district has about $700 million dollars in bonds for all the facilities that they have purchased to date. The audit only addressed one of the many bond issues. She is assuming that if the audit prevails on the one issue, all of the issues will be affected. She also assumes about 39,000 households to arrive at the $18,000.

[Russ_Boston]

Ok then if it happens I'll just have to figure another 18K into my budget.

Not a deal breaker (about $115 per month if financing).

But do you really think that even if the IRS rules against Morse that residents are going to foot the entire bill?

I like the POA's position - not enough info at this time to worry about it.