Is the Dispute with the IRS Finally Over?
 

According to today's Daily Sun The VCCDD scores a major victory over the IRS. This dispute, if you have been following it, has been going on for almost eight years. There are several Threads on this if you use the TOTV search engine.

As a former government employee, I can say, the Government has got all the time in the world. When you get rid of one "over ambitious" bureaucrat another takes their place.

The article in the Daily Sun ends with a quote---"the IRS examination has yet to be concluded". Perhaps someday the dispute will be over.

I got an alert a little after 9:18am. The key part for me was that the IRS said it will not seek retroactive monies and that means we do not have to worry about being assessed to pay off what was owed to the IRS. They also mentioned that the new definition of a Political subdivision or whatever it is called, encompasses The Villages so it looks good for us. The article also states that this ruling will alleviate the concern of existing and new home buyers.

I never thought that the IRS would pursue this to the end. It would not look good to make a decision that impacts a heck of a lot of retired people. We could always do like the Scientologist did when the IRS tried to pull their tax free status. They had all 30,0000 members file a lawsuit against the IRS which forced the IRS to relent rather than spend the time and money to fight all 30,000 cases. Imagine what we could do if we adopted that strategy. :)

Are the new bonds being issued still tax exempt?

Is it over? I doubt it; but it does look more favorable for residents.

Most of the information in the Daily Sun article comes from Janet Tutt.

I'm retired now and have a little more time to do things than I had in my previous working life. This sounds fun.

No, they've been offered as "taxable."

No, the new bonds are being issued as taxable ones.

No problem for the developer either way (new bonds). The new home buyers are on the hook for interest and principal, so what does the developer care if the interest is a point or two higher? It is the buyer who carries the load!

Didn't they just issue new taxable bonds replacing some of the old tax exempt bonds saving us mucho dinero?

IRS after another conservative group. Government gone wild

It certainly didn't help that the developer supported W and then Romney and now Jeb

and it certainly wasn't right that our amenities fees financed this dispute when it is the worse kept secret that the only one who controlled the exchange of facilities for money was the developer and yet the developer reigns supreme to this day. i mean there are pages and pages on the district paying for the illegal cutting of trees yet this dispute cost and is costing us substantially more?

I for one hope that it is finally over and we can put it in the past

Let's stay on topic and keep politics out of the discussion or the thread will be closed.

Moderator

The letter from Janet Tutt to VCCDD Board of Supervisors explaining it, dated 6/22/15 is here....

http://www.districtgov.org/images/IR...%206-23-15.pdf

And all updates on the IRS matter are here:

Village Community Development Districts

It's not the first time the IRS has gone on the attack, and you know, they could be wrong at times.

Thanks for the links

It is not just new home buyers that would pay higher interest rates. Since these bonds are for purchase of amenities (unlike the bonds issued for streets/sewers, etc.), all Villagers pay for the loans through their amenity fees.

True, but what was not said was that tax exempt bonds would have given an even lower interest rate. The transaction was just to take advantage of current lower interest rates, across the board, as compared to those in effect in earlier years.
Just like refinancing your old home mortgage. You save some interest over the years but pay today a pot of money to accountants, lawyers, bankers and brokers. In the end it is a net savings to you.

The bonds in the IRS dispute have nothing to do with TV home buyers or residents. They are bought by investors, usually institutional investors.

This woman speaks the truth.

I don't think the post was about the bonds in the IRS dispute. Looks to me the post was regarding the newly issued taxable bonds.

So many get BONDS confused gere and it isn't a simple issue. Some people think that the developer is being investigated for not paying their bills to the IRS which is far from the truth. I think the Morse's challenged the IRS in order to keep the concept of a CDD government alive. I am all for that.

The IRS dispute was not only about the nature of the bond but also the governmental structure of The Villages which does have a direct affect on The Villages of Lake sumter, Inc. TVLSI( Developer) and how they would operate or not in the future . Its the The Villages version of /Games of Thrones:D

Really, it's "far from the truth" that Morse was being challenged by the IRS for not paying taxes and he was really trying to keep the CDD concept alive? Amazing!

Morse issued $426 million in bonds, so he could use other peoples money to build the Villages, not his own which many of the uniformed believe, which the CDD concept allows. When he issued the bonds he declared they were tax free bonds and the $955 million profit he made on issuing the "tax free" bonds didn't require him to pay any income tax. The allegation the bonds were tax free is exactly what the IRS is challenging and Morse is challenging that allegation and using our amenity fees to pay his attorneys.

Here's a link to actual facts versus just made up TOTV "facts".

Billionaire Morse

A well informed explanation of what really happened, the Bloomberg article should be a real eye opener for some...

Is the Dispute with the IRS Finally Over?
 

Most large projects are built with "other people's money" in one way or another.

Irs
 

If this is true, and the Morse's challenged the IRS, then why are we paying the legal bills?

INCOMING!!!!!!! Seek shelter immediately!

The dispute is not with Morse, but with the central districts who issued the bonds to purchase the amenities. That is why the costs are being paid out of the district's income stream, which is our amenity fees.

I think this latest development is significant in that a major part of the dispute was the IRS position that the VCCDD and SLCDD were not political subdivisions and therefore not eligible to issue tax free bonds. This stance applied a standard that was not in effect at the time the bonds were issued and now the IRS agrees not to apply the new standard retroactively.

A voice of reason. Thank you.

Well done!

How will this latest ruling from the IRS effect the way the developer transfers all the facilities south of CR466 to the SLCDD? Will they be able to do it the same way they transferred all the assets north of CR466?

Well, the dispute is still not resolved so I don't expect anything to happen yet. IIRC, the interest rate used for the bonds determines the developer's net on the transfer. The lower the rate, the greater the net.

So, on one hand, they may want to wait until the dispute is completely settled. But, on the other hand, they may want to transfer now while interest rates are low, since they are expected to rise later this year if you listen to the Fed.

Thank you that was my take and that's what I side on these pages for a number of years but many people just accused me of being a complainer, whinner jealous of the Developer. but I kept telling them go online and get the original three IRS filings on this and it explains it all

I do hope it is over

Apparently the ruling that the Center Districts (due to Developer control) do not qualify as political subdivisions stands. All the latest IRS communication does is not apply that ruling retroactively to the previously issued bonds. Thus, in the future, it would seem that all bonds issued by the Developer-controlled center districts will be issued as taxable bonds-- as were the bonds issued to raise money to redeem the previously issued bonds.

Also note that while the latest IRS communication is good news for the Center Districts, the Developer, and us, two more rationales for the bonds to be taxable still could be applied to the previously issued bonds:
(1) Overissuance of bonds due to alleged overpricing of the assets sold by the Developer to the Center Districts. This issue does seem to have faded into the background.
(2) The bonds were allegedly issued to finance the private activity of the Developer and not for a public purpose.

Time will tell how this all plays out.

Bonds
 

The bonds were not issued by Morse, but by the VCCDD. The Villages contention is that the VCCDD is a governmental authority with the ability to issue tax free bonds. The bonds were not only not issued by the Morse family, but were used by the VCCDD to purchase assets from the developer. The stream of money from amenity fees were used in developing the value of the purchased assets.