IRS Updates?
 

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?

What's up with the audit??

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:

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.

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_file...etin201007.pdf

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

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!!

Will this cost residents Money, and how?

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.

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".

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:

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.

EdVinMass
Pretty good explanation coming from a resident of Stonecrest.

Who will Pay the IRS?
 

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?

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

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.

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.

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.

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.

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

Xavier

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?

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, the denial of disconfirming evidence, and other 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.

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:

Stonecrest
 

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.

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.

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.

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.

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?

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!!!!!!

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

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.

Must not of had enough 'Sparkle'.

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.

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.

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!

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.

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)

Where America's Money is Moving...
 

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