IRS Questions

[PennBF]

At the last POA meeting there was a summary of the IRS problems and in the POA August on line web site there is to be a factual summary as to how The Villages got to where it is and the various options. It was an excellant presentation by the POA along with a number of Q & A's. It is a shame more could not have attended the meeting to get some factual insight into the conditions.

[The Shadow]

Thank you so much for posting this information. As a want to be buyer I look for information like this daily. Can you tell me if a timetable for a resolution to the problem was discussed?

[PennBF]

The POA summary and details will be posted on their web site in August. The website is WWW.poa4us.org. The time tables are really very fluid depending upon a number of considerations. I think that if you read the POA posting you will have a a very good idea as to the background, the current complexities, and the problem in predicting an outcome.

[The Shadow]

Thanks again.

[The Shadow]

The POA summary and details will be posted on their web site in August. The website is WWW.poa4us.org. The time tables are really very fluid depending upon a number of considerations. I think that if you read the POA posting you will have a a very good idea as to the background, the current complexities, and the problem in predicting an outcome.
It’s Aug 3. When is this scheduled to be posted.

[PennBF]

I understand it will be on the POA web site in August so it should be posted pretty soon. It is a shame that more residents don't join and attend the POA meetings. They gave a very indepth explanation of the IRS conditions as it relates to the Villages. The POA is truly an advocate for the residents.

[Advogado]

I believe that the POA August Bulletin was e-mailed today to all POA members who had given the POA an e-mail address.

It contains a synopsis and analysis of the IRS controversy and explains its potential impact on Villagers. I would assume that it will be posted on the POA website within the next couple of days: http://www.poa4us.org/

Because of budgetary constraints, the August Bulletin is not being published in hard copy. That is too bad, given the importance of the IRS issue to residents and the lack of coverage by The Daily Sun.

[The Shadow]

It is now on line.

[Muncle]

A decent issue in that there are a couple columns which lay out policies, procedures, and histories that are readily available elsewhere but can be confusing. The explanation of acronyms and terms is helpful to the uninformed. However, the exceedingly long column on the IRS issue revealed absolutely nothing that has not been hashed and rehashed to nausea in this forum. And, like a Lauren Ritchie column, much of it was pure supposition, a series of "what ifs" with no basis or proof for the conclusions. On the purely positive side, no trees died.

One bit of news was included, the the POA was engaging a lawyer. The author bemoaned the fact that these legal costs would hurt the POA. That somewhat surprised me because I thought the modus operandi was for a klatch of POA VIPs to hire the lawyer so they could split the profit.

But other than that, and a few other things, typically good job, POA.




`

[The Shadow]

What I gleaned from the article is that the CDD has not responded to the May 18, 2009 offer to settle the investigation by (a) repurchasing $355M in bonds (b) pay 3M in back taxes (c) agree not to issue tax exempt bonds in the future.

As a result of not settling the IRS is expanding its investigation.

The POA is concerned that an IRS victory could result in cost being passed on to the residents.

Given that, I would think it safe to say the CDD does not have $355M and the POA is spending the money it uses to publish the “The POA Bulletin” to pay for legal counsel.

When a big bully/brother takes your lunch what chance do you have of negotiating the return of you lunch?

If I was authoring this as a movie it would go like this. The 5 people in the CDD would quit and retire to Belize, the IRS would take over the CDD property and liquidate it to settle the tax debt and the home owners would no longer pay amenity fees.

[PennBF]

It is clear some do not know the facts and have some anger at the POA. 1. As I understand it the POA took the risk of 2 lawsuits to protect the property owners and in both cases they prevailed and the court ruled in the POA favor and the property owners benifited. 2. There were 3 or 4 on the POA that actually risked their own money to fight the suits as if they lost they potentially would have big legal fees to personally pay. It was so unfair to accuse them of profiting. Who else in the community put their personal dollars at risk for the residents for the little personal funds they received in return. End result was $40M+ awared for the Residents which did exist before the suit. 3. What other agency is hiring an attorney for the sole purpoase of protecting the property owners? It may be worthwhile for those that are critical to attend the monthly member meetings of the POA to understand what is really going on. As I understand it the POA was established in 1975 and is the oldest organization working only for the property owners. Please remember that in both lawsuits the POA prevailed. In the first the original contracts made was restored after they were to be cancelled and those property owners continue to benifit from that suit and in the second $40M+ was brought back to the Villages for improvements. Sounds pretty good to me..!!! I guess it is fair to ask what would some of you do to protect the property owners. Critics are easy to find they are everywhere as its easy to be critical.. It is more difficult to find creative people who are willing to work and stick their necks out.

[The Shadow]

The 2 lawsuits you refer to did not involve the IRS, correct? It’s hard to fight the guy that makes the rules.

I am curious why a homeowner would not belong to the POA?

[PennBF]

I understand the IRS was not involved in either of the suits that were brought by the POA. Allegedly the first suit was to restore the contracts which were agreed to when the original property owners bought and which there was an attempt to cancel them and the second involved the lack of maintenance dollars set aside, (e.g.the Paradise CC, etc.). Not sure of the details on this. In both cases the POA prevailed in the courts and the property owners were the real winners. I agree with you, I do know understand why everyone does not belong to the POA since it is a basic organization without conflicts which represent the owners.

[Advogado]

I understand the IRS was not involved in either of the suits that were brought by the POA. Allegedly the first suit was to restore the contracts which were agreed to when the original property owners bought and which there was an attempt to cancel them and the second involved the lack of maintenance dollars set aside, (e.g.the Paradise CC, etc.). Not sure of the details on this. In both cases the POA prevailed in the courts and the property owners were the real winners. I agree with you, I do know understand why everyone does not belong to the POA since it is a basic organization without conflicts which represent the owners.

The major class-action lawsuit ($40 million payment by the Developer) is summarized at http://www.poa4us.org/ Click on the Lawsuit Settlement link.
The IRS was not involved, but it appears that there is one common issue in both that lawsuit and the IRS investigation-- the pricing by the Developer in selling amenity facilities and amenity contracts to the Villages Center District.

As to the question of why every doesn't belong to the POA, I think that there are four reasons:

While, in my view, everyone, as a matter of civic responsibility, should belong to and support the POA, the main reason that they don't is apathy. Public apathy exists in The Villages, like it does everywhere else. In fact there may be a bit more of it in The Villages since we all bought our houses there in hopes of a worry-free, fun-filled retirement. It is certainly a lot more pleasant to free-ride off the work of the POA--like the $40 million lawsuit settlement, which involved a tremendous amount of work by POA members, than it is to get involved. Most Villagers don't realize that without the $3 million/year being repaid to the Center District by the Developer under that settlement, the present level of amenities would not exist.

A second reason is that the traditionally acerbic tone of past articles in the POA Bulletin has turned some people off. A problem is that only people who are really passionate about an issue will take the time to investigate it (most of the issues are not simple ones) and write about it. I do think, however, that in recent issues, an effort has been made to use more measured language.

A third reason is that the local so-called newspaper is controlled by the Developer and buries, downplays, or spins stories (such as the IRS investigation) that could reflect unfavorably on the Developer or on The Villages itself. Villagers not reading the POA Bulletin or writing it off as the views of a bunch of malcontents generally aren't fully aware of those actions taken by the Developer that negatively impact, or could negatively impact, the residents. For example, there has been better coverage of the IRS investigation in the Orlando Sentinel (although sensationalized and containing inaccuracies) and NY Times than in the Daily Sun.

THE fourth reason why everyone does not join the POA is that the Developer supports a rival organization, the Villages Homeowner Association. The VHA which does perform some useful civic activities, in no way represents the interests of the Homeowners when they conflict with those of the Developer. In fact, its very existence is a patent attempt by the Developer to weaken the POA. In my view, the VHA ought to rethink its objectives, break with the Developer, and merge with the POA so that we would have one unified, independent, homeowners' organization representing our interests.

[PennBF]

I have just a simple question. On Page 4 of the VHA Voice Newspaper in the circle it indicates that the VHA and the Deveoper are Partners. The question is if there is a conflict between the Developer and the Property Owners who will represent the Property Owners if the VHA Partner is the Developer? As I understand it that is the role of the POA. Thus it makes sense for Property Owners to join the POA in order to ensure their interests are also represented.

[Taj44]

I agree with your assessment. From my observations, the POA truly represents the property owners.

[billethkid]

It sounds like someone has it in for TV:

http://www.tampabay.com/news/business/realestate/article1025975.ece

btk

[billethkid]

do absolutely nothing but protect their interests (most well run corporations do like wise). I can imagine that what ever TV has done has been well thought out. Who knows if they knowingly on certain issues decide for profit to skate on the thinner ice of right or wrong. But usually the smart entities who elect to do that are also smart enough to have funds sheltered some where in the event of a reckoning.

My guess is, TV is playing hard ball, as they usually do....there are as the Tampa article states, many other developers doing the same thing(s) more or less....hence that MAY be an opportunity for TV to fight city hall.

My guess is that no matter what the outcome TV residents will be isolated from financial impact. However, that well may be self serving biased, I hope so thinking.

btk

[jflynn1]

The POA did a great job of explaining exactly what is going on with the IRS lawsuits. The NewYork Times also provided great insight. You should really understand what your exposure is before you sign on the dotted line. A friend just purchased a new home here and tried to get the Villages to exclude any possible libility to the homeowner in the event the IRS wins.
The villages refused. They also purchased a model home and found out at the closing that because the house was built 11 months ago they only had a one month warranty.

[coach]

I find that hard to beleive that your friend purchased a model home and had only one month left on the warranty. If this is in fact true, the friend must be leaving out some details. Was the home purchased from the Villages and had it had no previous owner? When people buy the last few homes in a neighboorhood that is built out they may be buying a home that was built many months earlier. They get a new home warranty.

I don't beleive you have all the facts.

[Bogie Shooter]

I find that hard to beleive that your friend purchased a model home and had only one month left on the warranty. If this is in fact true, the friend must be leaving out some details. Was the home purchased from the Villages and had it had no previous owner? When people buy the last few homes in a neighboorhood that is built out they may be buying a home that was built many months earlier. They get a new home warranty.

I don't beleive you have all the facts.

I agree. There has to be more to this story.

[The Shadow]

I am surprised that 11 months of warranty is more important than the IRS issue. Go figure. :shocked:

[golf2140]

How can we stop the POA from depositing their advertisement bulletin on our driveways? I get tired of putting the ones from our street in the trash can. Can't they just set up pick up sites.

[The Shadow]

How can we stop the POA from depositing their advertisement bulletin on our driveways? I get tired of putting the ones from our street in the trash can. Can't they just set up pick up sites.
If memory serves me, this month the POA discontinued publishing the monthly publication and opted for email copies only in order to have money to pay for legal council to look into the IRS problem.

If putting the POA paper in the trash can without reading it does not stop the IRS you might try making a donation to the POA.

[Muncle]

The POA did a great job of explaining exactly what is going on with the IRS lawsuits. The NewYork Times also provided great insight. You should really understand what your exposure is before you sign on the dotted line. A friend just purchased a new home here and tried to get the Villages to exclude any possible libility to the homeowner in the event the IRS wins.
The villages refused. They also purchased a model home and found out at the closing that because the house was built 11 months ago they only had a one month warranty.


It's nice to see something pure in this discussion, and it is absolutely pure BS that the POA has added any information whatsoever re the IRS question. At best, they have paraphrased the details provided by Janet Tutt in the Daily Sun and printed on the CDD web site. http://www.districtgov.org/ They (POA) did respond pretty early on that the Ritchie articles were somewhat scaremongering with little or no basis in fact and urged TVers not to overreact. However, since their siding Armageddon seems to have chilled and their hospital jihad never got off the ground, maybe they need another cause (and income source?). I can't think of any other reason for the POA to be backing off their earlier sensible reaction and advice.

Months ago, the IRS was an on-going investigation with nothing but allegations from one side in the dispute. There were few facts to which both parties agreed and even fewer which could or should be discussed in the newspaper. That's what the legal system is for. And just because someone reiterates the same story in June, July, and August doesn't mean anything is happening in the case or that something should be done. And just because the NY Times jumps in late with a column that includes a threat from some 2 bit IRS investigator hardly makes them the great oracle.

And finally, if this situation worries potential buyers so much that they demand relief from liability on a case of which they are totally ignorant that is far from settled, may I suggest one of the many other retirement communities in the area and elsewhere. We don't need them.


`

[English Ivy]

How can we stop the POA from depositing their advertisement bulletin on our driveways? I get tired of putting the ones from our street in the trash can. Can't they just set up pick up sites.

I believe you and your neighbors can just call them and request they not deliver to your homes.

[Quixote]

They also purchased a model home and found out at the closing that because the house was built 11 months ago they only had a one month warranty.

Ive been reading this Irs story for months but I cant figure out what this comment about the 1 month warranty has to do with the Irs story. What does it have to do with it?

[JimJoe]

Can anyone tell me why the villages did not get a private letter ruling before selling the bonds?
A private letter ruling can be sought from the IRS. It is my understanding it is a written statement issued to the taxpayer by the Internal Revenue Service in which interpretations of the tax law are made and applied to a specific set of facts. [The] [f]unction of the letter ruling, usually sought by the taxpayer in advance of a contemplated transaction, is to advise the taxpayer regarding the tax treatment he can expect from the I.R.S.

[PennBF]

It is hard to realize there are residents out there that are so negative in nature that they even attack the volunteers (POA) who are working at no cost to make sure residents get a fair shake. I will absoliutely guarantee you they will not offer to return any funds they may gain from the volunteer's efforts or say a "thanks" when they gain from their work. It reminds me of the old story to "Let George do it"..These are the ones who let George do it rather than to pitch in and help with the work. I would venture they do not have any idea of the risk of the IRS prevailing and the impact it would have on them. To demonstrate my point to say something like "that includes a threat from some 2 bit IRS investigator hardly makes them the great oracle." is the type of statement that shows how uninformed the writer is. If the writer believes the IRS investigator is some 2 bit person goes beyond the pale. Does the writer actually think the IRS Investigator has not reviewed his finding and position with his senior management? Does the writer actually think he [IRS investigator] is working in some vacumm? Does the writer actually think there is no possible financial risk to the property owenrs in The Villages? WRONG !!People can bury their heads in the sand but that does not make the problem go away. It is here and the POA is the group that keeps its head above the sand in order to work for those that bury their heads in the sand.

[Taj44]

It is hard to realize there are residents out there that are so negative in nature that they even attack the volunteers (POA) who are working at no cost to make sure residents get a fair shake. I will absoliutely guarantee you they will not offer to return any funds they may gain from the volunteer's efforts or say a "thanks" when they gain from their work. It reminds me of the old story to "Let George do it"..These are the ones who let George do it rather than to pitch in and help with the work. I would venture they do not have any idea of the risk of the IRS prevailing and the impact it would have on them. To demonstrate my point to say something like "that includes a threat from some 2 bit IRS investigator hardly makes them the great oracle." is the type of statement that shows how uninformed the writer is. If the writer believes the IRS investigator is some 2 bit person goes beyond the pale. Does the writer actually think the IRS Investigator has not reviewed his finding and position with his senior management? Does the writer actually think he [IRS investigator] is working in some vacumm? Does the writer actually think there is no possible financial risk to the property owenrs in The Villages? WRONG !!People can bury their heads in the sand but that does not make the problem go away. It is here and the POA is the group that keeps its head above the sand in order to work for those that bury their heads in the sand.

Your comments are right on track. We are so fortunate to have the POA working for us. Many people are burying their heads in the sand over this IRS issue, mistakenly thinking that the "Developer" in his goodness and mercy will be our benefactor. With such huge sums of money at stake, that viewpoint is absolute foolishness in my opinion. I welcome the POA bulletins as a way of keeping up with things. They are available online at: http://www.poa4us.org/

[Muncle]

It is hard to realize there are residents out there that are so negative in nature that they even attack the volunteers (POA) who are working at no cost to make sure residents get a fair shake. I will absoliutely guarantee you they will not offer to return any funds they may gain from the volunteer's efforts or say a "thanks" when they gain from their work. It reminds me of the old story to "Let George do it"..These are the ones who let George do it rather than to pitch in and help with the work. I would venture they do not have any idea of the risk of the IRS prevailing and the impact it would have on them. To demonstrate my point to say something like "that includes a threat from some 2 bit IRS investigator hardly makes them the great oracle." is the type of statement that shows how uninformed the writer is. If the writer believes the IRS investigator is some 2 bit person goes beyond the pale. Does the writer actually think the IRS Investigator has not reviewed his finding and position with his senior management? Does the writer actually think he [IRS investigator] is working in some vacumm? Does the writer actually think there is no possible financial risk to the property owenrs in The Villages? WRONG !!People can bury their heads in the sand but that does not make the problem go away. It is here and the POA is the group that keeps its head above the sand in order to work for those that bury their heads in the sand.

Your comments are right on track. We are so fortunate to have the POA working for us. Many people are burying their heads in the sand over this IRS issue, mistakenly thinking that the "Developer" in his goodness and mercy will be our benefactor. With such huge sums of money at stake, that viewpoint is absolute foolishness in my opinion. I welcome the POA bulletins as a way of keeping up with things. They are available online at: http://www.poa4us.org/

Okay, first of all, you are both brilliant and know everything about the IRS situation and evidently about me. So I ask again, what at all has the POA done to increase actual knowledge of the case -- not rumors, not suppositions, not scaremongering -- actual facts, case histories, precedents, anything of the like? What have they publicized that was not available elsewhere? If I may quote Joe Gorman's post of 3/18/09:

"In closing, it should also be noted that the IRS did investigate the bonds once before in 2003 and found no problem. Also, the CDD financing technique in question is used regularly by many of the over 600 CDDs in the state.

"The IRS investigation is in a preliminary stage and has so far just asked for comment from our Central District on the initial assessment by an IRS investigator. The comment of the Central District is expected in a few weeks (late March) and after that there will be a response from the IRS.

"It is much too early to speculate on any outcome, and many of the speculative postings here, as well as Ms. Ritchie’s columns, are unnecessarily alarmist. It is possible that a more careful consideration by the IRS will result in no significant financial impact on our community.

"We would ask Villagers to stay informed, understand the issues, don’t jump to conclusions, and wait until more definitive information is available.

"And, as the POA Bulletin article pointed out, we expect that the developer of The Villages will act to protect the residents of The Villages however possible. The developer wants to build-out The Villages and sell houses. He doesn’t want a cloud of financial uncertainty hanging over the heads of residents which would impact the selling effort. So, we trust that the developer will do what is right for us."

You question my use of the term "that includes a threat from some 2 bit IRS investigator hardly makes them the great oracle." I will admit that this may appear to be a cheap shot, albeit one that is supported frequently in the various reports. Having worked for the federal government for 30 years, I am well aware that a healthy percentage of employees, for one reason or another, are incompetent -- not all, not even most, but a significant number. I am not saying that Dominick Servadio is incompetent. However his blatant cavalier attitude toward TV, its legal representatives, and its residents demonstrates a definitive "2 bit" identity. And as to whether Servadio and his immediate superior are acting as cowboys or have had their actions endorsed up the chain, read the stories and judge for yourself -- but remember, you do not have facts, just innuendos and opinions.

Now as to whether childish (dare I say asinine) judgment of anyone who dared question the actions, motives, etc. of the "volunteers" applied to me, I would first say that it's absolutely none of your business. Though I have no need to defend myself, I will play your game a little. Firstly, I don't run for club et al offices, but have served when drafted. I've a history of being the guy who actually organizes the events, maybe does the set-up and cleaning afterward, takes responsibility for maintaining the bulletin board and/or mailing list, or actually gets the luncheons going while others just bemoan the fact we don't have them anymore. I've not be overly active in clubs since living in TV -- just a few clubs, a couple chili cook-offs, Village rep stuff. I'm a bit upset that health reasons are causing me to quit what little I am doing, but that's life. But all this BS doesn't matter. I could just as easily be a couch potato who sits and bitches and vegetates. It is none of your business. The POA folks put themselves out there as the be all and end all of Villages salvation, attacking all things Morse, CDD, VHA. And you people come onto this forum spouting their nonsense, preaching that any worthwhile Villager has a moral imperative to join the POA, pay the dues, and go to the meetings. No thanx.

[PennBF]

I was going to disregard the note but felt some response was called for. You are right, your volunteering is none of my business however when you attack others who are volunteering then a response is called for. Your point that the IRS investigated the bonds in 2003 and "found no problems" is factually incorrect. They accepted the results of their investigation but left the door open for future reviews and audits which are going on now.. Your indication that the IRS to date only asked for comments is factually incorrect. In fact they made an offering settlement which was rejected by The Villages and as a result the IRS has expanded their investigation into additional years. Your point that the IRS is in a preliminary stage is correct. But the quesiton is how far into the prelimary stage? You are absolutely right to say it is much to early to speculate as to the outcome. The question is does that mean not to follow the progress but rather wait for an answer without preparation for what it might/could be? Your point that the Villagers should stay informed is without question correct. The question is how do they do that? I believe the POA article ONLY gave the chronology of the history of the IRS actions/responses. It did not suggest being alarmed nor give a projected conclusion. I will not get into addressing volunteering, etc. since that is really non productive and as you say is only the business of the volunteer.

[Muncle]

I was going to disregard the note but felt some response was called for. You are right, your volunteering is none of my business however when you attack others who are volunteering then a response is called for. Your point that the IRS investigated the bonds in 2003 and "found no problems" is factually incorrect. They accepted the results of their investigation but left the door open for future reviews and audits which are going on now.. Your indication that the IRS to date only asked for comments is factually incorrect. In fact they made an offering settlement which was rejected by The Villages and as a result the IRS has expanded their investigation into additional years. Your point that the IRS is in a preliminary stage is correct. But the quesiton is how far into the prelimary stage? You are absolutely right to say it is much to early to speculate as to the outcome. The question is does that mean not to follow the progress but rather wait for an answer without preparation for what it might/could be? Your point that the Villagers should stay informed is without question correct. The question is how do they do that? I believe the POA article ONLY gave the chronology of the history of the IRS actions/responses. It did not suggest being alarmed nor give a projected conclusion. I will not get into addressing volunteering, etc. since that is really non productive and as you say is only the business of the volunteer.

Once again, you're blowing smoke. MY points that you so cleverly rebut are not MY points, but those of Joe Gorman, the president of the POA. Please read before you comment.

But you are oh so correct in that it would be wonderful to "follow the progress" but how, exactly, does one do that. This is a case that is being discussed and negotiated behind closed door, as it should be, not in the newspapers. Are you privy to the plans of the IRS or to those of TV's attorneys?

[PennBF]

Sounds to me like Joe and the POA are on track.

[Bogie Shooter]

Go Muncle!
:agree:

[The Shadow]

If the plan envisioned by President Barack Obama and Congressional Democrats is enacted, the primary federal bureaucracy responsible for implementing and enforcing national health care will be an old and familiar one: the Internal Revenue Service. Under the Democrats' health care proposals, the already powerful — and already feared — IRS would wield even more power and extend its reach even farther into the lives of ordinary Americans, and the presidentially-appointed head of the new health care bureaucracy would have access to confidential IRS information about millions of individual taxpayers.
http://www.washingtonexaminer.com/politics/Health-care-reform-means-more-power-for-the-IRS-56781377.html

[katezbox]

And this has what to do with VCDD Bonds? Political has moved - you have to look left to see it, but the pain will be hopefully brief...