View Full Version : IRS investigation
watersdw
06-07-2013, 11:12 AM
My wife and I are "potentially" on the verge of buying property in TV and were wondering what the general thought was about the recent news on the IRS tax free bond issue? Is there trouble ahead? Do most people think the impact to homeowners is minimal? I would love to get some input from current residents and am surprised to see nothing here already.
rayschic
06-07-2013, 11:19 AM
My wife and I are "potentially" on the verge of buying property in TV and were wondering what the general thought was about the recent news on the IRS tax free bond issue? Is there trouble ahead? Do most people think the impact to homeowners is minimal? I would love to get some input from current residents and am surprised to see nothing here already.
Check this thread.
https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/i-r-s-rules-against-villages-79362/
TVMayor
06-07-2013, 11:45 AM
Trouble ahead? When the IRS rears its ugly head I would say that�s trouble but for who? The developer the home owner the bond holder the CDD. One thing I know for sure is the homeowner has not the foggiest idea of the impact on him/me. I hope to get an indication of the direction the trouble is blowing June 18 at the POA meeting. I would think that now that the ruling has come down a penalty would not be far behind, without one a negotiated settlement can not be arrived at.
That�s just my personal opinion.
rjm1cc
06-07-2013, 11:50 AM
My wife and I are "potentially" on the verge of buying property in TV and were wondering what the general thought was about the recent news on the IRS tax free bond issue? Is there trouble ahead? Do most people think the impact to homeowners is minimal? I would love to get some input from current residents and am surprised to see nothing here already.
My GUESS is that when new bonds are sold they will have a higher interest rate so the new homeowner will pay more. My guess would also be that for current homeowners there would be no change. However if litigation with the CDD happened the home owners could see their fees go up as they have to pay the expenses of the CDD.
Advogado
06-07-2013, 01:24 PM
My wife and I are "potentially" on the verge of buying property in TV and were wondering what the general thought was about the recent news on the IRS tax free bond issue? Is there trouble ahead? Do most people think the impact to homeowners is minimal? I would love to get some input from current residents and am surprised to see nothing here already.
Since nobody knows the outcome, nobody knows what, if any, impact there will be on homeowners. That is why you have seen nothing here already. However, the 2009 POA Bulletin article, referenced in the other thread on this subject, explains the potential impact. Read the article if you want to understand what this is all about.
At this point, about all we can do is wait, try to stay informed about developments, try to understand what is going on, and then, if the outcome prejudices, or is about to prejudice, homeowners, take (probably through the POA) whatever legal action is appropriate under the circumstances.
janmcn
06-07-2013, 01:56 PM
My wife and I are "potentially" on the verge of buying property in TV and were wondering what the general thought was about the recent news on the IRS tax free bond issue? Is there trouble ahead? Do most people think the impact to homeowners is minimal? I would love to get some input from current residents and am surprised to see nothing here already.
Unless you are a tax attorney, bond seller, or accountant specializing in taxes, you should gather as much material as necessary and have a trusted person in one of those fields look over it.
You can gather some of the material from this forum or google IRS vs The Villages and get over one million links. Do the due diligence now so that you're not sorry later.
ijusluvit
06-07-2013, 03:25 PM
My GUESS is that when new bonds are sold they will have a higher interest rate so the new homeowner will pay more. My guess would also be that for current homeowners there would be no change. However if litigation with the CDD happened the home owners could see their fees go up as they have to pay the expenses of the CDD.
It sounds like you are suggesting this bond decision has something to do with the bond folks pay with their home purchase. The bonds on home purchases and the CDD bonds have nothing to do with each other.
jflynn1
06-07-2013, 03:30 PM
My wife and I are "potentially" on the verge of buying property in TV and were wondering what the general thought was about the recent news on the IRS tax free bond issue? Is there trouble ahead? Do most people think the impact to homeowners is minimal? I would love to get some input from current residents and am surprised to see nothing here already.
Didn't your Vilages sales person disclose this to you when you were dscussing puchasing in The Villages? They should have. Has impact on the value of your home or potential home.
TVMayor
06-07-2013, 03:43 PM
Didn't your Vilages sales person disclose this to you when you were dscussing puchasing in The Villages? They should have. Has impact on the value of your home or potential home.
I don�t care who you are that is some funny stuff right there.
keithwand
06-07-2013, 03:50 PM
I don�t care who you are that is some funny stuff right there.
Disclose?
Our guy said what landfill on 466A?
There's no landfill or I'd tell you.
ilovetv
06-07-2013, 05:25 PM
My wife and I are "potentially" on the verge of buying property in TV and were wondering what the general thought was about the recent news on the IRS tax free bond issue? Is there trouble ahead? Do most people think the impact to homeowners is minimal? I would love to get some input from current residents and am surprised to see nothing here already.
This has been discussed for years in other threads and nobody really knows the outcome.
But we do know one thing for certain. We don't live forever, and most people we've met here said the only thing they should have done differently was to come here 10 years sooner (or more).
I'd buy a moderately priced home in TV, under $200,000, which is a low-risk purchase, and live my life while I have my good health and spouse with me to enjoy what we worked and saved for for the last 40 years.
Or I would rent a nice place on a long-term, annual lease.
CPA's, tax attorneys, and bond sellers who have never heard of TV, or who prefer their million-dollar places in Naples as our CPA and lawyer friends do, are not knowledgeable enough to advise on the value of living in TV.
janmcn
06-07-2013, 05:56 PM
This has been discussed for years in other threads and nobody really knows the outcome.
But we do know one thing for certain. We don't live forever, and most people we've met here said the only thing they should have done differently was to come here 10 years sooner (or more).
I'd buy a moderately priced home in TV, under $200,000, which is a low-risk purchase, and live my life while I have my good health and spouse with me to enjoy what we worked and saved for for the last 40 years.
Or I would rent a nice place on a long-term, annual lease.
CPA's, tax attorneys, and bond sellers who have never heard of TV, or who prefer their million-dollar places in Naples as our CPA and lawyer friends do, are not knowledgeable enough to advise on the value of living in TV.
Any professional advisor can gather enough material to read all the facts about the IRS investigation into The Villages and interpret them for their client. Would anybody invest $200,000 without a financial advisor? Why would someone not do their due diligence and get all the advice they can before buying?
ilovetv
06-07-2013, 06:31 PM
Any professional advisor can gather enough material to read all the facts about the IRS investigation into The Villages and interpret them for their client. Would anybody invest $200,000 without a financial advisor? Why would someone not do their due diligence and get all the advice they can before buying?
investment noun
Definition of INVESTMENT
: the outlay of money usually for income or profit
Yes. A home is not an "investment" to many of us because we don't expect to have income or profit from it. It is a place to live comfortably, affordably, safely, and enjoyably.
Comfortably, safely and enjoyably are not quantifiable in terms of dollars and cents.
Affordability is a dollars and cents figure, and I know we and most residents here could afford $3,540 per resident if, in a worst-case scenario, the 100,000 residents had to pay every dollar of the $354 million said to be tax due on the commercial district's bonds.
And residents having to pay ALL of that possible tax due is a pretty far-fetched scenario, considering the developer, CDD, bond sellers and bond holders involved and all their lawyers involved.
The quality of life and quality of our home, and the friendship, love and support, in good times and in bad, that we have with our neighbors and friends in TV.....is incalculable.
manaboutown
06-07-2013, 09:33 PM
This issue is a huge financial black hole. The last thing I am going to do is drink my Kool Aid and put my head back in the sand.
TVMayor
06-08-2013, 08:40 AM
Food for thought.
Who did not pay $354 million said to be tax due on the commercial district's bonds? Who, not the residents, not the developer, not the CDD, it was the bond holder, people that buy stocks and bonds.
Who sold tax free bonds and should not have done so, the CDD.
At one time the CDD was told they had to pay a fine and never sell tax free bonds again and they turned down the settlement.
I do not think it unreasonable to think the bond holders well have to pay the taxes on the bonds.
I do think it unreasonable to think the bond holders well POed and file a class action law suit against the CDD. The CDD has some amount of money in reserve and a limit on how much amenity fees can increase. I feel the fee limit is my firewall.
Maybe the CDD could redeem and reissue bonds paying a higher interest rate seeing they are not tax free.
gustavo
06-08-2013, 09:26 AM
This issue is a huge financial black hole. The last thing I am going to do is drink my Kool Aid and put my head back in the sand.
If drinking the koolaid is the last thing you do then you should be ok if you use a breathing straw:loco:.
mickey100
06-08-2013, 09:46 AM
Food for thought.
Who did not pay $354 million said to be tax due on the commercial district's bonds? Who, not the residents, not the developer, not the CDD, it was the bond holder, people that buy stocks and bonds.
Who sold tax free bonds and should not have done so, the CDD.
At one time the CDD was told they had to pay a fine and never sell tax free bonds again and they turned down the settlement.
I do not think it unreasonable to think the bond holders well have to pay the taxes on the bonds.
I do think it unreasonable to think the bond holders well POed and file a class action law suit against the CDD. The CDD has some amount of money in reserve and a limit on how much amenity fees can increase. I feel the fee limit is my firewall.
Maybe the CDD could redeem and reissue bonds paying a higher interest rate seeing they are not tax free.
The CDD is the arm of the developer - the developer is the one that ultimately bears responsibility. I've seen many posts where he is lauded by the residents. It will be interesting to see if he steps up to the plate and does what is right.
graciegirl
06-08-2013, 10:04 AM
The CDD is the arm of the developer - the developer is the one that ultimately bears responsibility. I've seen many posts where he is lauded by the residents. It will be interesting to see if he steps up to the plate and does what is right.
I have seen many posts where the same posters seem to enjoy bashing The Morse family and often offer simplistic and largely incorrect summaries that make it appear that the developers are little more than a bunch of crooks.
I think part of their disdain is based on the fact that the Morses do not espouse the same political ideals as those posters and maybe partly because in the last ten years they have become very rich using the American principle of free enterprise.
On this issue that the IRS has ruled, there have been no laws broken and no blame placed. it is an issue on whether a CDD has the right to issue tax deductible bonds and it is a premise and an entity they are investigating unlike any entity ever in this country. Sad, because this entity is working nicely.
It is my very uneducated opinion based on listening to educated opinions that this issue will be debated in courts of law for a very long time and probably long after I am dead.
Harry Gilbert
06-08-2013, 10:25 AM
It is my very uneducated opinion based on listening to educated opinions that this issue will be debated in courts of law for a very long time and probably long after I am dead.
Those of us that are younger and potentially have 30+ years left ARE watching this issue before deciding on the Villages. I know I don't want to pay for someone else's mistake.
And as far as bashing the Morse family, some take it personal. This isn't personal. This is business. And quite frankly while they did a outstanding job with the business some of their decisions have been questionable
manaboutown
06-08-2013, 11:03 AM
Personally I feel the developers to date have done a fantastic job of planning, building, operating and maintaining the infrastructure and amenities at very reasonable costs to the residents. I seriously doubt a "real" government could have done nearly as well and certainly not remotely as cost effectively or efficiently. Moreover The Villages's grounds, rec centers, pools and so on are better designed, prettier, cleaner and better run and maintained than any I have seen offered by any municipal government - anywhere. IMHO a well run private company can almost always beat a lethargic inefficient and costly bureaucratic government elephant at just about anything - and still make a profit. My compliments to the Morses on a truly world class development!
My concern relates to what unanticipated costs and quality of maintenance and service issues Villagers are likely to face in the future. Those who have been on board up until now have without question been able to reside in a lovely environment, have access to numerous recreational opportunities and enjoy a wonderful lifestyle, all at reasonable cost. Congratulations to them for spotting and moving to The Villages at a great time!
It will probably be years before the iRS issue is resolved. Indeed in the meantime many other issues, both related and unrelated, may arise. On the upside the developers are politically and economically powerful and no doubt have access to the best legal counsel available. On the downside someone must pay all the costs. In any successful business all costs are eventually passed on to the customers; in the immediate case that would be Villagers.
mickey100
06-08-2013, 11:03 AM
Those of us that are younger and potentially have 30+ years left ARE watching this issue before deciding on the Villages. I know I don't want to pay for someone else's mistake.
And as far as bashing the Morse family, some take it personal. This isn't personal. This is business. And quite frankly while they did a outstanding job with the business some of their decisions have been questionable
Well said. :agree:
graciegirl
06-08-2013, 11:07 AM
Those of us that are younger and potentially have 30+ years left ARE watching this issue before deciding on the Villages. I know I don't want to pay for someone else's mistake.
And as far as bashing the Morse family, some take it personal. This isn't personal. This is business. And quite frankly while they did a outstanding job with the business some of their decisions have been questionable
Hey! It doesn't matter that you are younger or 73 like me...by the way...here in this place, 70 is the new 40!
We aren't idiots any of us. We are investing the biggest hunk of money in our lives, most of us in our home. We all or mostly all knew about the ongoing IRS investigation and tried to make some sense of it. But many very monetarily conservative people chose to live here.
This isn't a baby game, we all can make our own decisions. I am glad we bought our first home five years ago and are still enjoying it every bit as much today. We are in our sixth year of joyful living that I personally did not expect to have in my golden years.
And of course there are all kinds of risks buying in any neighborhood, anywhere. Our quite nice neighborhood near Cincy that we left has a few houses not kept up as spiffily as they once were and that neighborhood at the age of 25 isn't quite as pretty as it once was. Meth labs spring up in toney suburbs, drugs are creeping into suburbia, things ain't what they used to be and there are no iron clad guarantees.
There is risk in any thing we do.
And no one can tell anyone what they should do.
I think the Morses run things like any good business does, they try to take advantage of any kind of situation that will pul money in the coffers, but they have risked that money time and time again. I would have quit with my first ten million and bought a house here and just stopped. They probably aren't angels but I don't think they are devils either...and fortunately I was not born yesterday. I am quite old as you pointed out. ;)
NJblue
06-08-2013, 08:37 PM
What I would do if trying to make a decision like this is scope out the worst case scenario - i.e., the IRS prevails on everything and the residents are forced to cough up all of the money. It was stated above that the IRS claims that it is due $354 million. Sounds like a crushing financial burden doesn't it? However, remember that TV is huge. We currently have roughly 100,000 residents which probably translates to 55-60,000 households. Let's assume 55,000. Taking the $354 million and allocating it to 55,000 households means that the worst case scenario is that each household would have to come up with $6,436. That's not an insignificant amount of money, but only you can determine if that amount is sufficient to keep you from buying into what TV has to offer. Note, however, that with increasing house prices, that $6,436 can easily be gobbled up with a year's worth of appreciation. You can wait this out and buy several years down the road, but almost certainly you will be paying a lot more for your house then than what you stand to lose because of this IRS stuff.
That's my opinion.
TVMayor
06-08-2013, 10:54 PM
What I would do if trying to make a decision like this is scope out the worst case scenario - i.e., the IRS prevails on everything and the residents are forced to cough up all of the money. It was stated above that the IRS claims that it is due $354 million. Sounds like a crushing financial burden doesn't it? However, remember that TV is huge. We currently have roughly 100,000 residents which probably translates to 55-60,000 households. Let's assume 55,000. Taking the $354 million and allocating it to 55,000 households means that the worst case scenario is that each household would have to come up with $6,436. That's not an insignificant amount of money, but only you can determine if that amount is sufficient to keep you from buying into what TV has to offer. Note, however, that with increasing house prices, that $6,436 can easily be gobbled up with a year's worth of appreciation. You can wait this out and buy several years down the road, but almost certainly you will be paying a lot more for your house then than what you stand to lose because of this IRS stuff.
That's my opinion.
I was not a resident when the IRS violation took place, what part of the $6,436 would I be obligated to pay? Seeing the real estate company and the owner I dealt with did not disclose this to me will they have to pay? Seeing I did not contract with anyone in TV for $6,436 worth of anything will the IRS bill me direct? Seeing I did not commit the violation why would I be expected to participate in the financial punishment and possible have a lean put on my house and have it taken away for something I did not do?
dgammon6
06-09-2013, 07:58 AM
I have seen many posts where the same posters seem to enjoy bashing The Morse family and often offer simplistic and largely incorrect summaries that make it appear that the developers are little more than a bunch of crooks.
I think part of their disdain is based on the fact that the Morses do not espouse the same political ideals as those posters and maybe partly because in the last ten years they have become very rich using the American principle of free enterprise.
On this issue that the IRS has ruled, there have been no laws broken and no blame placed. it is an issue on whether a CDD has the right to issue tax deductible bonds and it is a premise and an entity they are investigating unlike any entity ever in this country. Sad, because this entity is working nicely.
It is my very uneducated opinion based on listening to educated opinions that this issue will be debated in courts of law for a very long time and probably long after I am dead.
Ditto
Rickg
06-09-2013, 08:14 AM
What I would do if trying to make a decision like this is scope out the worst case scenario - i.e., the IRS prevails on everything and the residents are forced to cough up all of the money. It was stated above that the IRS claims that it is due $354 million. Sounds like a crushing financial burden doesn't it? However, remember that TV is huge. We currently have roughly 100,000 residents which probably translates to 55-60,000 households. Let's assume 55,000. Taking the $354 million and allocating it to 55,000 households means that the worst case scenario is that each household would have to come up with $6,436. That's not an insignificant amount of money, but only you can determine if that amount is sufficient to keep you from buying into what TV has to offer. Note, however, that with increasing house prices, that $6,436 can easily be gobbled up with a year's worth of appreciation. You can wait this out and buy several years down the road, but almost certainly you will be paying a lot more for your house then than what you stand to lose because of this IRS stuff.
That's my opinion.
This is far from over, and when it is there MAY be some kind of settlement. I don't blame the Morses, they follow the advice of their attorneys etc. they don't come up with this stuff on their own. There are MANY other CDD's in the country that have done the same and will be impacted. I for one will not loose any sleep!
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