IRS Updates?

[jkpender]

I recently checked the Village Community Development Website to check for updates to the ongoing IRS audit. It looks as though nothing has been updated since January. Has anyone heard anything more about a possible IRS ruling on the matter?

[Rudolph]

What's up with the audit??

[kentucky blue]

I recently checked the Village Community Development Website to check for updates to the ongoing IRS audit. It looks as though nothing has been updated since January. Has anyone heard anything more about a possible IRS ruling on the matter?

There have been no new updates on the IRS situation in several months, that i am aware of, but it is definitely ....................."The Elephant In The Room"

:confused:

[JimJoe]

This is one reason I do not like our government. There is no way it should take this long to figure out. The people of TV have a right to have this resolved IN THEIR FAVOR as soon as possible. Sometimes I wonder does the government just keep things going to make them more expensive and therefore citizens settle.

[The Shadow]

I recently checked the Village Community Development Website to check for updates to the ongoing IRS audit. It looks as though nothing has been updated since January. Has anyone heard anything more about a possible IRS ruling on the matter?
I look for new info daily and the latest I have seen was dated January. Remember the IRS problem is about the VCCDD selling tax free bonds to buy things like the Savannah Center from the developer.

Go to,

http://www.poa4us.org/bulletins_files/bulletin201007.pdf

And read �Use if the Savannah Center� it starts on page 1.

[JimJoe]

It should never have happened. Who ever sold the bonds should have obtained a private letter ruling and determination BEFORE the bonds were sold. That being said, the people of TV had nothing to do with this. The government should drop all claims before now and issue a ruling on future bonds.. PERIOD! Come on.. be fair!!

[BUC]

Will this cost residents Money, and how?

[Bogie Shooter]

If you do a search on "irs issues" or "vcdd bonds" you will get enough information and opinions to keep you busy all day just reading the posts. And most of your questions will be answered.

[kentucky blue]

It should never have happened. Who ever sold the bonds should have obtained a private letter ruling and determination BEFORE the bonds were sold. That being said, the people of TV had nothing to do with this. The government should drop all claims before now and issue a ruling on future bonds.. PERIOD! Come on.. be fair!!

Totally agree, who sells bonds without first knowing the tax ramifications??The people of TV had nothing to do with this,BUT in the end, they will pay the cost of any IRS decision, it certainly won't be the developers. Also.................. I don't believe the word "Fair" is part of the IRS vocabulary.

[JimJoe]

Totally agree, who sells bonds without first knowing the tax ramifications??The people of TV had nothing to do with this,BUT in the end, they will pay the cost of any IRS decision, it certainly won't be the developers. Also.................. I don't believe the word "Fair" is part of the IRS vocabulary.

If the Govs can drop the voter intimidation investigation for "lack of evidence", they can surely drop this IRS harassment of the people of TV for lack of "fairness".

[kentucky blue]

If the Govs can drop the voter intimidation investigation for "lack of evidence", they can surely drop this IRS harassment of the people of TV for lack of "fairness".

Please JimJoe,...... no more applications of using common sense, we are dealing with the U.S.Gov't here.How are they going to pay for the 16,500 additional IRS auditors they are planning to hire at a taxpayer cost of $10,000,000,000?????!!!!!!!:police::confused:

[EdV]

Totally agree, who sells bonds without first knowing the tax ramifications??The people of TV had nothing to do with this,BUT in the end, they will pay the cost of any IRS decision, it certainly won't be the developers. Also.................. I don't believe the word "Fair" is part of the IRS vocabulary.

KB, by reason of your posts in this thread and elsewhere, it appears to me that you need to be "enlightened" about the ownership and governance of property in TV.

First and foremost allow me to respectfully point you to the sample Covenants and Restrictions for the Villages of Lake Sumter which is posted in the nuts and bolts section of this forum.

Section 4.1 of that document clearly states that the purchase price is solely for the purpose of the homesite and not any of the amenities. Furthermore it states that those amenities are owned by the developer and anyone he chooses to assign or sell them to in the future. But by contractual agreement each homeowner is entitled to use those amenities and is required to pay for the services needed to maintain them. However, that fee is contractually limited annually to no more than the consumer price index.

That the developer set up two special CDD's (one north of 466 and the other south of it) and placed all of the amenities that he owned under those two jurisdictions should be of no concern to any current or prospective TV homeowner. And the fact that he decided to sell some of those amenities to the CDD for a hefty profit instead of leasing them to those CDD's as he had been doing in the past is his business too. But the IRS has decided to make it their business simply because the money raised to pay the developer for those amenities (golf courses) was raised with federal tax free bonds issued by those two CDDs and that is the basis of their objection.

In the end, regardless of the settlement with the IRS, no TV homeowner will be �paying for it� as you and others have suggested. Those two CDD�s have no taxation power over TV homeowners and any Amenity Fee increase is contractually limited to the consumer price index.

As for governance of the rest of TV, as far as I know, the 4 homeowner CDDs north of 466 are now fully controlled by the homeowners in those CDDs. They elect members to serve on the board of trustees who then establish the budgets to maintain the common grounds (landscaping, groundwater control, etc.) which then sets the annual CDD maintenance fee charged to the homeowners in those CDDs. And the IRS has had no problems with the bonds issued for those CDDs and the way they have evolved as well they shouldn�t.

You are entitled to your opinion, but if you decide to voice it here, it would be more courteous to point out facts to support it.

[Bogie Shooter]

EdVinMass
Pretty good explanation coming from a resident of Stonecrest.

[poromo]

EdVinMass,
If no TV residents will be paying the IRS and if the IRS rules against the CCDs who will pay the taxes owed? It seems the CCDs primary source of income is the amenity fees and if it can not raise the amenity fees (contractually) how will the IRS get paid? Will the CCDs sell assets (golf courses, rec centers etc..) to pay the amount due?

[mulligan]

Sounds to me like it would be the entity that made the profit on the sale. Developer??

[bkcunningham1]

I'll come at it from a different angle. What liability would the Property Owners Association have, if any, in the matter? Their website outlining the matter from their prospective says they've obained legal counsel and are in touch with the IRS.

[EdV]

Allow me to respond.

The importance of the POA should not be overlooked. After all, they were responsible for bringing about a lawsuit a couple of years ago that resulted in (among other things) the recognition by the developer, of the Amenity Authority Committee made up of TV homeowners from each of the numbered CDDs. Although this committee has no decision making power, they at least represent a unified TV homeowner voice in the management of the amenity services provided by the two developer controlled amenity CDDs (VCCDD and SLCDD). I would look to them for late breaking developments if they have an attorney gathering information.

As far as who will actually end up paying to straighten this out, well that gets us into speculation. The point I tried to make above is that it won’t be the TV homeowners because there ‘s no legal vehicle for the two special CDDs to use for that. But I can tell you that in the lengthy complaint from the IRS agent that started all this, the agent pointed out several times that the federal tax free bonds issued by the two CDDs are callable. That was his way of suggesting that one way out would be for the developer and his two special CDDs to buy back the bonds at their present value and re-issue them as taxable bonds.

And who would make up the difference if the re-issuance of those bonds was the settlement, I don’t know but it won’t be TV homeowners directly in the form of a special assessment or big increase in the amenity fee. But I suppose it could result in a drastic cut back in the level of services, condition of the executive courses and recreation centers, etc.

Do you really think they would allow it to get to that. I don’t. In fact, think about it, it may amount to tens of millions of dollars, but the developer can afford it. He just won’t go down without a good fight.

Oh and yes Bogie Shooter, I’m in Stonecrest right next door. But you know the saying “what goes around…” and we have a few developer issues there that I’m keeping a close watch on too.

[2BNTV]

EdVinMass:

Still a wannabee.

That is as clear an explanation of this issue after reading many posts on this issue and couldn't make heads or tails of it in terms of how it would affect homeowners.

Good job on both your posts.

[kentucky blue]

Allow me to respond.

The importance of the POA should not be overlooked. After all, they were responsible for bringing about a lawsuit a couple of years ago that resulted in (among other things) the recognition by the developer, of the Amenity Authority Committee made up of TV homeowners from each of the numbered CDDs. Although this committee has no decision making power, they at least represent a unified TV homeowner voice in the management of the amenity services provided by the two developer controlled amenity CDDs (VCCDD and SLCDD). I would look to them for late breaking developments if they have an attorney gathering information.

As far as who will actually end up paying to straighten this out, well that gets us into speculation. The point I tried to make above is that it won?t be the TV homeowners because there ?s no legal vehicle for the two special CDDs to use for that. But I can tell you that in the lengthy complaint from the IRS agent that started all this, the agent pointed out several times that the federal tax free bonds issued by the two CDDs are callable. That was his way of suggesting that one way out would be for the developer and his two special CDDs to buy back the bonds at their present value and re-issue them as taxable bonds.

And who would make up the difference if the re-issuance of those bonds was the settlement, I don?t know but it won?t be TV homeowners directly in the form of a special assessment or big increase in the amenity fee. But I suppose it could result in a drastic cut back in the level of services, condition of the executive courses and recreation centers, etc.

Do you really think they would allow it to get to that. I don?t. In fact, think about it, it may amount to tens of millions of dollars, but the developer can afford it. He just won?t go down without a good fight.

Oh and yes Bogie Shooter, I?m in Stonecrest right next door. But you know the saying ?what goes around?? and we have a few developer issues there that I?m keeping a close watch on too.

Thanks for all your valuable info, but would not the CDD have to sell the golf courses,town centers,recreation facilities and utility plants to settle the judgement against the IRS? Since you seem to really have studied this issue, i would like your opinion on the current makeup of the CDD, the "Arms Length Transaction" of the sale, and appraisers who could not furnish the IRS with any backup documents to justify their appraisals.Finally, i didn't realize, always looking at every side of an issue and asking why, was such a negative.

[Xavier]

There have been no new updates on the IRS situation in several months, that i am aware of, but it is definitely ....................."The Elephant In The Room"

:confused:

Are you serious? "The elephant in the room" for whom? :)

Xavier

[JimJoe]

Allow me to respond.

The importance of the POA should not be overlooked. After all, they were responsible for bringing about a lawsuit a couple of years ago that resulted in (among other things) the recognition by the developer, of the Amenity Authority Committee made up of TV homeowners from each of the numbered CDDs. Although this committee has no decision making power, they at least represent a unified TV homeowner voice in the management of the amenity services provided by the two developer controlled amenity CDDs (VCCDD and SLCDD). I would look to them for late breaking developments if they have an attorney gathering information.

As far as who will actually end up paying to straighten this out, well that gets us into speculation. The point I tried to make above is that it won�t be the TV homeowners because there �s no legal vehicle for the two special CDDs to use for that. But I can tell you that in the lengthy complaint from the IRS agent that started all this, the agent pointed out several times that the federal tax free bonds issued by the two CDDs are callable. That was his way of suggesting that one way out would be for the developer and his two special CDDs to buy back the bonds at their present value and re-issue them as taxable bonds.

And who would make up the difference if the re-issuance of those bonds was the settlement, I don�t know but it won�t be TV homeowners directly in the form of a special assessment or big increase in the amenity fee. But I suppose it could result in a drastic cut back in the level of services, condition of the executive courses and recreation centers, etc.

Do you really think they would allow it to get to that. I don�t. In fact, think about it, it may amount to tens of millions of dollars, but the developer can afford it. He just won�t go down without a good fight.

Oh and yes Bogie Shooter, I�m in Stonecrest right next door. But you know the saying �what goes around�� and we have a few developer issues there that I�m keeping a close watch on too.

You do seem very tuned into this problem so I would definitely like your ideas on why they did not get an IRS private letter ruling and determination before they sold the bonds. If they had done that, none of this would have happened. Does anyone know who the bonding attorney was that handled this for the District?

[Pturner]

Thanks for all your valuable info, but would not the CDD have to sell the golf courses,town centers,recreation facilities and utility plants to settle the judgement against the IRS? Since you seem to really have studied this issue, i would like your opinion on the current makeup of the CDD, the "Arms Length Transaction" of the sale, and appraisers who could not furnish the IRS with any backup documents to justify their appraisals.Finally, i didn't realize, always looking at every side of an issue and asking why, was such a negative.

KB, I'll be happy to share my opinion on these issues:
1) Would CDD have to sell the amenities?
To sell the amenities would be to kill the goose that continues to lay the golden eggs. Since that would be dumb, it's more likely the CDDs would refinance the debt, if necessary, to settle any judgement.

2) Arms lengh transaction?
No, I don't think the amenities sales transactions were "arms length".

3) Appraisals
I'm inclined to believe that independent appraisals would have been lower.

I agree with you that looking at all sides of an issue is sensible, though it requires accepting some "cognitive dissonance". Just because you love something (or somebody) doesn't mean that it (or him/her) is perfect. Likewise, just because you dislike something or someone, doesn't mean that thing or person is without good-- perhaps even some wonderful-- qualities.

As stated in a wikipedia article on the subject, "dissonance can also lead to confirmation bias (https://www.talkofthevillages.com/wiki/Confirmation_bias), the denial of disconfirming evidence, and other ego defense (https://www.talkofthevillages.com/wiki/Ego_defense) mechanisms". Examples abound in the Political thead, in my opinion-- but, of course, I could be wrong.

So there you have it. It does not bother me to admit that the developer of TV-- a fabulous "visionary" who managed to create a paradise for active seniors-- is not perfect. Nor is TV perfect. I merely think that, on whole, it's the most delightful, wonderful place I can find to spend the rest of my life.

[kentucky blue]

pturner,
When i first located this board, i found a thread ,"The Lifestyle? What protects it's future?"It was the the most informative thread i've read.A number of posters made excellent and perceptive comments.I found yours mesmerizing, discussing your concerns about the IRS situation and the reality of it all.Also your concerns about the possible scenario of the developer or CDD trying to raise more money by selling amenity packages to non Villagers.That would increase traffic,diminish access to TV with the overcrowding and thus reduction of property values.
I didn't take your comments as negative, but concerns about TV's future, everybody should have all the information available so there are no surprises as they make their decisions on retirement options.I still believe TV is an amazing community, with incredible Villagers, but the IRS settlement is a huge red flag that needs to be settled soooooooooooooooon.As far as TV sales agents,WVLG radio station, and The Village Daily Sun there is no IRS problem, .:confused:

[poromo]

EdVinMass,
Thank you for all your insight into this potential IRS problem. I am seriously considering purchasing in Stonecrest and you also mention the Stonesrest developer has some issues you are keeping an close watch on. Can you let us know what they are? I'd like to go into the future with my eyes wide open.
Thanks.

[graciegirl]

EdVinMass,
Thank you for all your insight into this potential IRS problem. I am seriously considering purchasing in Stonecrest and you also mention the Stonesrest developer has some issues you are keeping an close watch on. Can you let us know what they are? I'd like to go into the future with my eyes wide open.
Thanks.

Dear Poromo.

I don't have the ability to present my ideas like my friend PTurner but I do know this. I like The Villages far better than Stonecrest. I am a golfer (of sorts) and I prefer to choose among dozens of courses rather than one and with all apologies to my friends who live in Stonecrest, it just isn't as "sparkling" as The Villages. I would guess that there isn't as much financial strength to it's backing either, since it is going up against Goliath every day.

However, If I wanted to dance every night and get drinks two for one, I could just get in my golf cart and zip over to The Villages as many Stonecrestors do and they also benefit from all of the neat retail and restaurants that the large population of The Villages has attracted.

I think that every place that you can choose to retire has some pluses and some minuses and The Villages is better and more secure than most against a potential closing.

There are no guarantees. Who knows what tomorrow will bring to anyone, anywhere? I have lived carefully and conservatively all of my life and my choice is still The Villages.

[The Shadow]

I discovered TV in 1988 that was pre senior days for me. After that day it was my opinion Mr. Schwartz had built a community that no government to this day has had the ability to duplicate. SS was nearing completion at that time. People of my young age of 48 at the time would dream of some day after a product and successfully work career, of moving to the TV to live life in paradise. Some people were more successful than I for sure. Some people came to paradise and purchased homes that cost a half a million dollars plus. At appears those people can afford a large serving of paradise.

All this brings me to a question that has been on my mind since the IRS reared its ugly head. The high achievers, the ones that can afford the best, the ones that excel in business, why does TV real estate have 22 pre owned houses ranging from $500,000 to $850,000 listed for sale? Are the money wise people jumping ship? Are they getting out while the getting is good?

[graciegirl]

I discovered TV in 1988 that was pre senior days for me. After that day it was my opinion Mr. Schwartz had built a community that no government to this day has had the ability to duplicate. SS was nearing completion at that time. People of my young age of 48 at the time would dream of some day after a product and successfully work career, of moving to the TV to live life in paradise. Some people were more successful than I for sure. Some people came to paradise and purchased homes that cost a half a million dollars plus. At appears those people can afford a large serving of paradise.

All this brings me to a question that has been on my mind since the IRS reared its ugly head. The high achievers, the ones that can afford the best, the ones that excel in business, why does TV real estate have 22 pre owned houses ranging from $500,000 to $850,000 listed for sale? Are the money wise people jumping ship? Are they getting out while the getting is good?

OR...are they building something new like a lot of Villagers do? Or perhaps they have moved to the village of Heavenly.

[EdV]

EdVinMass,
Thank you for all your insight into this potential IRS problem. I am seriously considering purchasing in Stonecrest and you also mention the Stonesrest developer has some issues you are keeping an close watch on. Can you let us know what they are? I'd like to go into the future with my eyes wide open.
Thanks.

Poromo, it wouldn�t be appropriate for me to comment on that here, but you can PM me and I�ll fill you in on the details.

For the record though, were it not for a badly arthritic ankle from an old skiing accident that limits my ability to golf to once or twice a month, I would be living in TV.

[The Shadow]

EdVinMass,
Thank you for all your insight into this potential IRS problem. I am seriously considering purchasing in Stonecrest and you also mention the Stonesrest developer has some issues you are keeping an close watch on. Can you let us know what they are? I'd like to go into the future with my eyes wide open.
Thanks.

Stonecrest has far more covenants than TV. They will not give you a copy before you buy. You get your copy when you close. Surprise! You can read the covenants at the Marion County Clerks web page. Check it out when you have a couple days with nothing to do. Do not start looking under Stonecrest. The covenants started when Stonecrest was Floridian Club Estates. FCE went bankrupt.

If you want to put screens on you windows you have to get approval. Check amity fees, I think some areas about $190 and others I think $360 not sure. Golf is open to public.

[BobKat1]

OR...are they building something new like a lot of Villagers do? Or perhaps they have moved to the village of Heavenly.

All good points. There are probably a wide variety of factors.

Plus the recession and stock market volitility has effected the incomes and net worth of many people.

I wonder what the neighborhood pool is like in The Village of Heavenly?

[kentucky blue]

All this brings me to a question that has been on my mind since the IRS reared its ugly head. The high achievers, the ones that can afford the best, the ones that excel in business, why does TV real estate have 22 pre owned houses ranging from $500,000 to $850,000 listed for sale? Are the money wise people jumping ship? Are they getting out while the getting is good?

Unfortunately, your list does not include the MLS premier listings or the 28 high priced Lake Shore Cottages still left ,that have all been reduced in price. What happened to all the buyers?The IRS situation needs to be settled.....................yesterday!!!!!!

[poromo]

Gracie Girl,
No one can deny that TV is one of the most sparkling places on earth. Comparing David (Stonecrest) to Goliath in this area is not a fair match.
However, I am very attracted to a truly gated community something that TV does not offer, even in Bridgeport. It is a very important issue for me and probably why I am taking so long to make a decision. However, at this point, I am leaning towards Stonecrest.
Poromo

[Taj44]

I discovered TV in 1988 that was pre senior days for me. After that day it was my opinion Mr. Schwartz had built a community that no government to this day has had the ability to duplicate. SS was nearing completion at that time. People of my young age of 48 at the time would dream of some day after a product and successfully work career, of moving to the TV to live life in paradise. Some people were more successful than I for sure. Some people came to paradise and purchased homes that cost a half a million dollars plus. At appears those people can afford a large serving of paradise.

All this brings me to a question that has been on my mind since the IRS reared its ugly head. The high achievers, the ones that can afford the best, the ones that excel in business, why does TV real estate have 22 pre owned houses ranging from $500,000 to $850,000 listed for sale? Are the money wise people jumping ship? Are they getting out while the getting is good?
I expect you have people moving for the typical reasons that others in lower finanancial categories move - be closer to grandchildren, death of spouse, etc. And people who choose to spend their money on the more expensive homes may decide they'd rather build new instead of buy pre-owned, so they can get exactly what they want. I know of one couple who bought a new, expensive home, didn't like the neighborhood, put the house on the market and are building a new home in another area of The Villages. I looked online at some of the $500,000+ homes , and a number of them are on the north side, and appear a little dated in their decor, which will make them less desireable. At least one of them, at over $500,000 didn't even have granite countertops. Some of the other premier homes in Bridgeport, while high priced, and large square footage, are rather close to neighbors, and don't have any kind of view. The people probably paid too much a few years ago, and are pricing the homes too high now, so the homes are remaining un-sold. And of course, their are fewer potential buyers at that price point.

[EdV]

.......I know of one couple who bought a new, expensive home, didn't like the neighborhood, put the house on the market and are building a new home in another area of The Villages....

Must not of had enough 'Sparkle'.

[graciegirl]

Unfortunately, your list does not include the MLS premier listings or the 28 high priced Lake Shore Cottages still left ,that have all been reduced in price. What happened to all the buyers?The IRS situation needs to be settled.....................yesterday!!!!!!

I have been watching the Premiers and a number have been sold. Perhaps people in the market for a Premier may also like to build their own. I also know that in any real estate market the more expensive homes have fewer buyers. I also feel that the people who still have Premiers on the market are asking more than the market will bear and much more than they payed for them. Also some were purchased during the "boom" in real estate that drove prices up all across the U.S.

Senior people, even those with money, are usually pretty savvy shoppers, in my humble opinion and they won't pay more for a home than it is worth or more than a decent rise in price figuring in improvements and inflation, which in this case is not happening.

[EdV]

C'mon folks can we get back on topic. Back away from the kool-aid fountain and get outa the hot sun.

This thread is supposed to be about the IRS's investigation into the tax free status of certain TV CDD bonds. It's not about Stonecrest or the my community is better than yours silliness.

I know it's hard, but let's try to stay focused.

[laryb]

Unfortunately, your list does not include the MLS premier listings or the 28 high priced Lake Shore Cottages still left ,that have all been reduced in price. What happened to all the buyers?The IRS situation needs to be settled.....................yesterday!!!!!!I do not profess to be an expert in the IRS issue, and as a matter of fact, I know very little about it. When we started our buying process a few months ago, we were aware of the issue and still bought. Having taken part in the TV "lifestyle" and after meeting many people who have a deep loyalty to TV, we really can't see the thousands of wonderful TV residents letting their way of life be destroyed. I might be naive, but I really believe in this place and the tenacity of it's residents. As far as the cottages in Lake Sumter are concerned, I stayed in 2 of them and they are very nice, but they are basically large designers in a great location. From what we saw on several model tours, you get a lot more house in the premier series for the same if not less money. After looking at both, unless money is not an object, I think the majority would go with a premier. But what do i know, both are out of my reach!

[The Shadow]

Gracie Girl,
No one can deny that TV is one of the most sparkling places on earth. Comparing David (Stonecrest) to Goliath in this area is not a fair match.
However, I am very attracted to a truly gated community something that TV does not offer, even in Bridgeport. It is a very important issue for me and probably why I am taking so long to make a decision. However, at this point, I am leaning towards Stonecrest.
Poromo

Stonecrest, gated? If you are a non resident stop at the gate keeper and say I am going to play golf, he will give you a pass to display put it on the floor and go anyplace in Stonecrest you like.

Now if you live in Stonecrest and want to sneak into Katie Belle�s I know the secret password. Don�t ask.

[Jakel]

Hello, although I am new to the TV forum, I have read many things about the IRS situation, but several things I cannot seem to find out, and you all seem to know a lot about it, and I thought you could enlighten me.

My first question is who purchased the bonds?? Are these sold on the open market?? I know the residents purchase a bond when they buy a new home...it is app. $25,000 give or take depending on the costs of the property, but I thought that was a Bond for the roads and sewer etc. I am assuming we are talking about 2 different Bonds...am I correct??

My second question is....The Bonds that were sold totaled over 350 million dollars. Now I am not an appraiser, but I would think that a Golf Course would cost maybe 2 or 3 million, and a Rec center, maybe a million, a pool maybe $100K...so I am thinking that 350 million dollars could buy almost everything in the Villages, other than the homes, and they are paying for the roads and infastructure in their Home Bond. So who would agree to pay for Golf Courses and Rec Centers, assuming they were over their appraised value??

Finally, it seems that the people who would lose if the IRS comes down against the Bond issue, is the people who bought the Bonds and/or the Developer....how would the tax deductability of the Bonds affect the homeowners.

We really hope to move to the Villages, so we are just trying to be informed!!
(Please don't send me to read other threads)

[deb133]

I discovered TV in 1988 that was pre senior days for me. After that day it was my opinion Mr. Schwartz had built a community that no government to this day has had the ability to duplicate. SS was nearing completion at that time. People of my young age of 48 at the time would dream of some day after a product and successfully work career, of moving to the TV to live life in paradise. Some people were more successful than I for sure. Some people came to paradise and purchased homes that cost a half a million dollars plus. At appears those people can afford a large serving of paradise.

All this brings me to a question that has been on my mind since the IRS reared its ugly head. The high achievers, the ones that can afford the best, the ones that excel in business, why does TV real estate have 22 pre owned houses ranging from $500,000 to $850,000 listed for sale? Are the money wise people jumping ship? Are they getting out while the getting is good?


Read last month's article of Forbes Magazine, "Where America's Money is Moving." Looks like #10 on the list is Sumter County, Florida!

http://www.forbes.com/2010/06/14/whe..._slide_11.html

[The Shadow]

Read last month's article of Forbes Magazine, "Where America's Money is Moving." Looks like #10 on the list is Sumter County, Florida!

http://www.forbes.com/2010/06/14/whe..._slide_11.html

bad link it said.


Something's gone awry! The page you requested could not be found:read:

[kentucky blue]

Hello, although I am new to the TV forum, I have read many things about the IRS situation, but several things I cannot seem to find out, and you all seem to know a lot about it, and I thought you could enlighten me.

My first question is who purchased the bonds?? Are these sold on the open market?? I know the residents purchase a bond when they buy a new home...it is app. $25,000 give or take depending on the costs of the property, but I thought that was a Bond for the roads and sewer etc. I am assuming we are talking about 2 different Bonds...am I correct??

My second question is....The Bonds that were sold totaled over 350 million dollars. Now I am not an appraiser, but I would think that a Golf Course would cost maybe 2 or 3 million, and a Rec center, maybe a million, a pool maybe $100K...so , it's a I am thinking that 350 million dollars could buy almost everything in the Villages, other than the homes, and they are paying for the roads and infastructure in their Home Bond. So who would agree to pay for Golf Courses and Rec Centers, assuming they were over their appraised value??

Finally, it seems that the people who would lose if the IRS comes down against the Bond issue, is the people who bought the Bonds and/or the Developer....how would the tax deductability of the Bonds affect the homeowners.

We really hope to move to the Villages, so we are just trying to be informed!!
(Please don't send me to read other threads)

Jakel,
I hate to be the one to tell you this, but you REALLY need to read the other threads on the IRS topic.There are numerous insightful post from people alot smarter than me ( i heard you out there........who isn't???).I"ve read the newspaper accounts and the 100 page IRS report, talk about a cure for insomnia. I've concluded, in as simplified terms possible,.................if it looks like a duck, quacks like a duck, and walks like a duck, it's a duck.Good luck Mr. Morse and your legal team, is Perry Mason available??.
So what should one do until the IRS renders it's decision? For all you concerned wannabe's........RENT!!Come to TV and rent a place, enjoy the terrific amenities, and the fabulous Villagers and wait for the uncertainty to be resolved. Just don't stick your head in the sand and hope it all goes away, because it's not happening. Finally .......caveat emptor.

[bkcunningham1]

Jakel, in a column on The Villages Community Development Districts' website, Janet Tutt, district manager, speaking about the IRS issue, said,
"So, the next time you receive
an e-mail regarding an action of
any of the District Boards or
the AAC, please take a minute
to review the Web site information
before becoming upset or
passing on an e-mail that may
not be accurate. And don�t forget
our Customer Service number,
753-4508, if you would like
to speak to any District staff
members about any issue or
rumors you need clarified."

Give them a call and see if you can get some information to educate yourself.

[The Shadow]

Jakel, in a column on The Villages Community Development Districts' website, Janet Tutt, district manager, speaking about the IRS issue, said,
"So, the next time you receive
an e-mail regarding an action of
any of the District Boards or
the AAC, please take a minute
to review the Web site information
before becoming upset or
passing on an e-mail that may
not be accurate. And don�t forget
our Customer Service number,
753-4508, if you would like
to speak to any District staff
members about any issue or
rumors you need clarified."

Give them a call and see if you can get some information to educate yourself.

Good luck you all, I have been waiting for a return phone call from Janet Tutt for longer than I can remember.:ohdear:

[graciegirl]

Rent. KB

Wait. Shadow

The world is gonna go on. I can't do much about the mess it's in but when I am here, it is lovely for this day, this hour, this minute. And as much as I think that I am immortal, none of us have half a century left. I am so glad I am here and maybe I will hang around until I am 120.

Gracie, Sand Head.

[Jakel]

I really enjoy this forum, and I have read thousands of posts, although I almost never post myself, because I can usually find the answers through other posts...I've read the same questions about many topics, I know what not to spill on my Granite countertops and whether I should seal my tile floors....I know about the lawn ornaments, and which is the best Village to move into...(Thanks to Gracie) I know that Brownwood was the name of the Developers holdings up North, and I know that more people in the Villages like Verizon than like ATT. What I don't know is the answers to my previous post...a few simple questions...I am not looking for the party poopers or the head in the sand opinions, I was hoping for a few direct and educated answers from someone who understands the issue....Hello are you out there??

[Jakel]

I had a very informative talk with Janet Tutt, who called me back this evening. She spent a very patient half hour plus, trying to educate me about the Bonds sold to purchase the Amenities. This is a different Bond than the one you all have who have purchased new homes in The Villages. The Amenity fees paid by the homeowners in the affected areas,(North of 466) pay down the cost of those Bonds, and pay for the services you receive at the facilities. Since the Developer has not transferred all the Amenities over (South of 466), those fees are still collected by the Developer, and he pays the amount necessary to provide the services, and pockets any profits.

The amount raised by the Bonds paid to the Developer to cover the Amenities, is somehow calculated by the revenue stream. I sort of understand this, although it is a financial thing, it seems to me to be a little backwards. As a non financial person, I would think the value would be based on the actual tangible properties, like pools, and Rec Halls and Golf Courses, but evidently it is based on your $135 fee times all the homes in the affected areas, times 12 times however many years they factor in.

The whole thing seems to be run so well, that there is actually a surplus.

As for the IRS thing possibly going badly...I received some assurance that it would not be charged back to the Homeowners.

I hope I made an acurate accounting of our conversation, but I must report that I continue to be amazed at how nice eveyone is who has anything to do with The Villages, and now for me that extends to the Village Government.

[graciegirl]

:024:I had a very informative talk with Janet Tutt, who called me back this evening. She spent a very patient half hour plus, trying to educate me about the Bonds sold to purchase the Amenities. This is a different Bond than the one you all have who have purchased new homes in The Villages. The Amenity fees paid by the homeowners in the affected areas,(North of 466) pay down the cost of those Bonds, and pay for the services you receive at the facilities. Since the Developer has not transferred all the Amenities over (South of 466), those fees are still collected by the Developer, and he pays the amount necessary to provide the services, and pockets any profits.

The amount raised by the Bonds paid to the Developer to cover the Amenities, is somehow calculated by the revenue stream. I sort of understand this, although it is a financial thing, it seems to me to be a little backwards. As a non financial person, I would think the value would be based on the actual tangible properties, like pools, and Rec Halls and Golf Courses, but evidently it is based on your $135 fee times all the homes in the affected areas, times 12 times however many years they factor in.

The whole thing seems to be run so well, that there is actually a surplus.

As for the IRS thing possibly going badly...I received some assurance that it would not be charged back to the Homeowners.

I hope I made an acurate accounting of our conversation, but I must report that I continue to be amazed at how nice eveyone is who has anything to do with The Villages, and now for me that extends to the Village Government.

Thank you Jakel.

Beautifully presented. Calming. Believable. Sensible. Non inflammatory.

I guess I don't worry about this IRS issue only because of the overwhelming evidence that this is not a fly by night, pull the wool over your eyes group who is running our town. The attention to minute details and the evidence of more than enough money to continue to float this boat can be seen in the cleanliness of every space, the well run everything, and the overdone rec centers. lol.

[The Shadow]

:024:

Thank you Jakel.

Beautifully presented. Calming. Believable. Sensible. Non inflammatory.

I guess I don't worry about this IRS issue only because of the overwhelming evidence that this is not a fly by night, pull the wool over your eyes group who is running our town. The attention to minute details and the evidence of more than enough money to continue to float this boat can be seen in the cleanliness of every space, the well run everything, and the overdone rec centers. lol.

Ok, TV is everything you say it is. You are correct. You get a cookie. Question, why is the IRS involved?? Does the IRS not understand the rules they police?? The gorilla/elephant/IRS is still in the room.

[graciegirl]

Ok, TV is everything you say it is. You are correct. You get a cookie. Question, why is the IRS involved?? Does the IRS not understand the rules they police?? The gorilla/elephant/IRS is still in the room.

Thank you for the cookie.

I am appointing YOU to worry about it. I have some sand activities I gotta do.;)

And....don't let this blonde hair fool ya.

And...I own the worrying title of the western world.

[bkcunningham1]

Very basically, the Village Community Development Districts has asked the IRS for technical advice on whether the VCDD is a political subdivision for purposes of the IRS tax code on revenue.

Based on the IRS' own "laws" and codes, the VCDD is allowed to do this. That is where the issue stands now. The VCDD is waiting for a reply.

The question you asked, does the IRS understands the rules they police, doesn't take into account that people in the United States can appeal or petition decisions by the IRS. They may do many things to petition or contest the IRS decision. One of the things they may do is ask for a TAM. Have you ever heard of the United States Tax Court?

This is from the IRS: A technical advice memorandum, or TAM, is guidance furnished by the Office of Chief Counsel upon the request of an IRS director or an area director, appeals, in response to technical or procedural questions that develop during a proceeding. A request for a TAM generally stems from an examination of a taxpayer's return, a consideration of a taxpayer's claim for a refund or credit, or any other matter involving a specific taxpayer under the jurisdiction of the territory manager or the area director, appeals. Technical Advice Memoranda are issued only on closed transactions and provide the interpretation of proper application of tax laws, tax treaties, regulations, revenue rulings or other precedents. The advice rendered represents a final determination of the position of the IRS, but only with respect to the specific issue in the specific case in which the advice is issued. Technical Advice Memoranda are generally made public after all information has been removed that could identify the taxpayer whose circumstances triggered a specific memorandum.

http://www.irs.gov/irs/article/0,,id=101102,00.html

[The Shadow]

Thank you for the cookie.

I am appointing YOU to worry about it. I have some sand activities I gotta do.;)

And....don't let this blonde hair fool ya.

And...I own the worrying title of the western world.

You get the cookie and I worry about it, you drive a hard bargain. :coolsmiley:

[The Shadow]

Very basically, the Village Community Development Districts has asked the IRS for technical advice on whether the VCDD is a political subdivision for purposes of the IRS tax code on revenue.

Based on the IRS' own "laws" and codes, the VCDD is allowed to do this. That is where the issue stands now. The VCDD is waiting for a reply.



Could I trouble you to reword that? Are you saying maybe the VCDD is not of the status required for the IRS review? What about a time table?

It is my understanding you can fight the IRS right to the top and if you win that does not set precedence for the next year or another person or that you can do the same thing south of 466. I may be wrong.

[bkcunningham1]

From my understanding, that is what the entire dispute is about. To determine if the VCDD falls into the legal category of political subdivision or special purpose local governments in order to issue tax exempt bonds.

The Villages Community Development Districts' website, Janet Tutt, district manager, wrote this in a previous column:

It should be noted that a
similar inquiry by the IRS in
2003 resulted in �no change�
to the District�s operation. Of
course, we cannot predict how
this examination will end...
Keep in mind,
the VCCDD is one of about
600 CDD�s in the State of
Florida. The issues raised in
these 5701 forms would apply
to the vast majority of those
600 districts as they issue
bonds, just like the VCCDD
issues bonds. As part of the
bond process, each one of
those bond issues is reviewed
by bond counsel � attorneys
who are schooled in the law as
it relates to tax exempt bonds.
The VCCDD used a bond
counsel firm for the issuance
of our bonds. Other CDD�s
around the State used a variety
of bond counsels to review
their transactions. All of the
firms found that the District
was a government and had
the authority to issue bonds.
In addition, the VCCDD
bonds were approved by the
local circuit court, as all CDD
bonds are, but one of our
bond issues was appealed to
the Supreme Court of the
State of Florida. The Supreme
Court of the State of Florida
found the VCCDD�s actions
were appropriate.
We are going to
work with them; we�re going
to review Chapter 190 and
explain that community development
districts are specialpurpose
government under
Florida law and, as such, can
issue tax-exempt bonds...
The recreational
facilities were purchased based
on both the value of the facilities
themselves, plus the value
of the cash flow derived from
operating those facilities. Cities
and counties buy utility companies
all the time on such a
�cash flow� approach and issue
tax-free municipal bonds to do
so. There is nothing unusual
about the way the District valued
the assets that were
acquired by the VCCDD...
The
District believes that the recreational
amenities have been
valued and sold in a normal
and appropriate manner to the
VCCDD, so as to benefit the
residents and perpetuate the
lifestyle being enjoyed.

[EdV]

The makeup of the two �special� CDDs that contain all the amenity facilities is that The Developer still controls them via appointed membership on their board of trustees since he still owns a majority of the land that makes up those two CDDs.

Initially, the developer leased the amenities to those CDDs and was paid out of the funds collected from your contractual amenity fees. But over time, the developer has been selling those amenity facilities to the two respective CDDs. I know, I know, sounds like he�s selling them to himself, but that�s what�s been happening and so far it�s legal.

When the developer sold each facility to the CDD, the price was not based on the asset value plus some appropriate value for good will. Instead, the accounting team for the developer based the price on the asset value plus the expected lease revenue that the developer would be expected to receive over a decade or two into the future. But before you jump on this and say �that�s outrageous�, remember that those executive golf courses are contractually tied into your amenity fees. In other words, you will be paying for them whether you use them or not. That�s how a 2 million dollar executive course becomes a 20 or 30 million dollar course. The accountants said, �you can pays me now or pays me later but either way you pays�.

Why didn�t the developer submit a request to the IRS for approval to issue the tax free bonds? Well, I don�t know all of the possible details of what could or could not have been done but I do know that all of the bonds were posted to the Municipal Securities Rulemaking Board and you can search for them under the names of the two CDDs if you wish: http://emma.msrb.org/Search/Search.aspx (http://emma.msrb.org/Search/Search.aspx)

Who will the IRS go after for settlement? That�s actually an easy one in my mind. It won�t be the buyers of those tax free bonds (John Q Public) because the IRS has almost never done that. How about The Developer? Nope, can�t do that either because The Developer merely sold assets that he owned to the CDDs. So the only logical choice would be the two CDDs that issued the bonds as �federally tax free� when they shouldn�t have, according to the IRS agent making the accusations. OK, so now we�re finally getting to the bottom of this. But wait, isn�t The Developer effectively the two special CDDs because it has total control over them? Yes, but remember that I pointed out in an earlier post that no homeowner in TV has nor ever will have any title to or ownership of any part of the amenities including golf courses, recreation centers, etc. Given that, it shouldn�t be a major concern but the press loves a story that involves millions of dollars and they ran with it.

Does this IRS audit threaten the numbered CDDs in TV as well as the 500 or so other CDDs that have been established in Florida? I would like to say that that�s a crock of you know what. But I can�t because I couldn�t possibly know every detail of those entities. What I can tell you is that as far as I�ve seen, the 10 numbered districts in TV that are essentially private homes and that have or will be governed by election of officers to The Board of their respective CDDs is evolving in accordance with the intent of the Florida CDD law and should also be recognized by the IRS as being able to issue tax free bonds.