Significant production company
 

There is no way that I pretend to understand all the IRS tax laws. However, could someone please explain to me how a private company called Significant Productions, as was discussed in the Sun News paper today can be considered a nonprofit and, therefore tax free company. I believe it is owned or managed, or somehow very involved with Whitney Morse and its sole purpose is to provide entertainment to villagers through extravagant ticket prices at the Sharon and the Studio theaters. How in the world can this be considered a nonprofit operation?

What is the Sun News paper?

It’s not a private company - it’s a 501c3. NO ONE takes the profits from the organization.

Whitney Morse is NOT on the board of directors, he may have provided a donation to get it started.

I am sure the actors appreciate a performing arts non profit to perform. Especially in an era where many small theaters are closing.

It is like an orchestra or a ballet troop in a city being incorporated as a non profit, you just don’t like that the Morse name is associated with it.

Slight correction, she rather than he.:smiley:

thanks papa that should stop about 10 pages of Morse family bashing

It's a way of maximizing profits through tax loopholes.

A 501c3 is NOT a tax loophole, it is the tax code. That section of the code was specifically put into the code; they had to apply for 501c3 status with the IRS.

How are they maximizing profits? the board of directors do not get paid, they are volunteers.
Are the performers paid too much? Is the music director paid too much?

Do you support the following paying taxes (and not having as much money to put into performance? The Rockettes; the New York Philharmonic; the Philadelphia Ballet; the Los Angels Orchestra?

i am sorry, but having a nice performing arts troupe makes the Villages a nice place to retire; not everyone plays golf and pickleball all day.

:boom:

I just did some research - Significant Production just got their 501c3 designation in August 2023.

Here is the IRS definition of a nonprofit -

Organizations organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, educational, or other specified purposes and that meet certain other requirements are tax exempt under Internal Revenue Code Section 501(c)(3)

Your statement that " its sole purpose is to provide entertainment to villagers through extravagant ticket prices at the Sharon and the Studio theaters" needs to be qualified by looking at the organization's purpose statement in their incorporation records which should fit into the definition above.

In other terms, the money they make above their expenses has to be used for a purpose as indicated above. For example all of the 'profit' earned by the organization might go to further the education of performing arts. Were they a 'for profit' organization those profits would be given to the individual shareholders, owners or investors for their personal use.

There's nothing wrong with maximizing profits. That's likely the goal of almost any business, non-profit or for-profit. Its a matter of where that profit goes. In the case of a for-profit organization the profits are distributed to the Owners (shareholders, members etc.) for their personal use. It becomes taxable Income to those Owners. For a non-profit the profits are channeled into the 'charitable' purpose of the organization.

By definition a 'charitable' purpose may also be religious, scientific, public safety, literary or educational.

There really are no 'Tax Loopholes'. There is tax code (Federal Tax Law) that makes certain allowances to reduce taxation. Itemized Deductions would be an example of this.

Any business that does not use all tax avoidance methods to increase its income, needs to sack the accountant.
Tax evasion is a different beast.

Do some more digging and find the names and principles of the other 501c(3) entities that are and have been involved throughout the community. Some are broad reaching in their goals and efforts and some exist with a much narrower focus, as appears to be the case here with "Significant Productions". Many of these also have a tie to individuals of substantial wealth.

My experience over the many years has been that the people of significant means are less infatuated with money and more generous than the average person and especially those who bemoan the success of your efforts and energy. The uninformed and the ignorant see the wealthy as Scrooge McDuck doing swan dives into piles of gold coins and dollar bills in his massive vault, nothing could be farther from the truth. A typical multimillionaire (or billionaire) is much less liquid than most would think, they have their wealth invested and tied up in ventures and enterprises that grow their investments by creating jobs and products needed or wanted by others. They are not the ruthless money grubbers that the media portray them to be, but they are very protective of their work and efforts, just like everyone else.

Over the last 10 years I have sent a significant amount of time studying and trying to understand The Villages, their business model, and how they do what they do so successfully. The amount of resources, focus, and energy that is invested into the planning and growth of this community, to say nothing of the huge personal risk that continues to be taken, is far beyond the possible comprehension of those that only want look at it on the surface. One could write several doctoral thesis on everything from construction management techniques, land development, and business management to local government relations by studying how the generations of the developer's family have done business. They have had great success and a few failures over the years.

I've only ever met one member of "the family", Jennifer, one time during the opening of the Ezell RC, the rest remain as much an enigma to me as they do to the rest of the resident of The Villages. I have felt their wrath on more than one occasion with my work (as G.W.P.) and my positions on matters of public interest. The only benefit I've received is from understanding their business enough to build a moderately successful business of my own that capitalize on what and how they build here, contrary to what some individuals and organizations would have you believe.

Some of the best advice I was ever given was that if I wanted to be rich and successful to do with rich people do and not what poor people do. That mentor and I had many discussions on the topic over the years, some of the things I realized and learned is that being successfully is hard work, that you can't do it alone, that giving back never diminish what you accomplish, and the seven deadly sins and seven heavenly virtues apply to business as well as ones personal life.

Yesterday's news & advertising for homes in The Villages.

“Any business that does not use all tax avoidance methods”, you can say the same thing for “any person” too. My goal is to pay the least amount of taxes legally.

so, I believe I read that she only paid $11 and change in property taxes. How does that happen?

:confused: Wow...... I'm a little confused. Could you please tell us where you read that? I just checked the Lake Co. web site for taxes and it states they paid $147,032.49 in 2022 property taxes. I'll show you my link if you show me yours. :rolleyes:
Just a moment...

I'm more interested in how the PGAT is a not-for-profit with tax exemption status.

They just gave billionaire Tiger Woods $35 million dollars this year for their fake PIP program. Player Impact Program.

In total, they handed out over $100 million dollars to 10 players with this program.

I don't know why churches are also tax exempt yet the Vatican is filthy rich.

Heck BLM is a not for profit and the leaders bought multi-million dollar mansions.

The whole IRS agency is a joke and desperately needs an entire overhaul.

The IRS doesn't make the rules. They didn't create 501(c)(3)s. Congress makes the rules.

And on this subject the IRS needs all the money which was allocated to enforce the rules and collect all the taxes that are due. As long as taxes are being collected we need an agency to collect all the many taxes in force. Wait times are ridiculous. You can't get through on the main line for days. When you do get through it's a 45-90 minute wait. The IRS CPA hot line has the same problem. Though I'm glad I haven't had a client audited in 20 years it shows the lack of audits and the loss of potential income.

Yes there are areas in the IRS that need overhaul. We certainly don't need politicians from either party using the IRS for going after their opponents. Congress needs to pass laws preventing this from happening,

The above is good information. The key with non-profits is their stated purpose as defined in their articles of incorporation. Most non-profits are totally legitimate, and their actual operations are consistent with their articles of incorporation, which allow them nonprofit status. Unfortunately, there are illegitimate non-profits that hire fancy lawyers who can manipulate the laws/tax codes to form non-profits based on a stated purpose within their articles of incorporation which are a front and not consistent with the true operations/intentions of the organization. The motivation for doing this is not just to get tax exempt status, but can be for other perks granted to nonprofits such as exemptions to zoning requirements not afforded to other parties. I have personal experience with one such illegitimate non profit, that’s purpose is stated as religious in their articles of incorporation. The entity is only religious as a front, but because of their non profit status they are exempt from zoning and can run a for profit business in a residential location on land that is zoned as single family residential use only. They run their business behind locked gates, and when regulators make a visit it has to be by appointment. When the regulators show up, out come the Bible’s and on goes the religious dog and pony show. The neighborhood surrounding them is fully aware of what they do on a daily basis because they live there and are first hand witnesses. It is abundantly clear that the religious thing is a front, or shell game they play to gain a favorable status not afforded regular businesses.

It’s an absolute shame that this happens as it casts doubt on the legitimacy of the many great and well intended non profits out there. But the moral of the story is that not all non profits are created equal, so do your research and carefully select the ones to support. Lastly, I have no idea about the specific entity being discussed in this thread, it very well might be one of the good ones.

Two points - their 501(c)(3) designation is retroactive to their date of application.
In three years there are additional IRS forms to file to support that the organization has indeed acted as a charitable organization.

Interesting that if the 501(c)(3) designation is revoked ALL donations - even past years - are considered not charitable - non deductible - and amended returns are required to be filed.

Great comment Don thanks for posting, you are probably the most informed as anyone about the inner workings of The Villages. Plain and simple its a business. All businesses have a few weak areas, The Villages is no different.

Seems to me many/most posters want to pay the minimum tax themselves, but everybody else should pay the maximum! :shrug:

A Not-for-profit that makes no money generally goes out of business the same as a For-profit that makes no money.

The IRS is generous. Haw about those tax free 501(c)(6) not-for-profit football leagues, like the NFL?
I.R.C. § 501(c)(6) — Business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues (whether or not administering a pension fund for football players)…

you took the word out of my mouth and/or keyboard, lol :eclipsee_gold_cup:

Great Post
 

This is a great reply. Don probably knows more about The Villages and its management than any single individual in the area. I have always been amazed at the quality of the management of TV and how so many different operations function so well. If anyone doubts this, he/she should give some thought to everything that takes place every day in TV. Just organizing the mowing/trimming/irrigation of the medians and the main streets takes considerable effort and skill. When the roundabouts are replanted, it is with plants that TV grows in its own greenhouses. Live entertainment is provided at four venues. The chairs at the venues are delivered and picked up. The utilities all work. 13 championship golf courses and 40+ executive courses operate daily. I can't count the number of swimming pools, pickleball courts and other recreational facilities that are operated daily. In The Villages we have a medium-size city that is operated in an excellent manner by a private company at minimal cost to its residents. The organization and operation of TV at this level of excellence is mind-boggling.

If that's not enough, consider the future expansion plans in the south. The developer has laid out an entirely new city that will be built-out over the next 20 years. All this is being done with private money.

I've never understood the people who post critical, if not derogatory, comments about the Morse family. I will always be amazed that a family-owned business could have the foresight, skills, and dedication to do what the family has done with The Villages. The family deserves the millions they have made. Anyone who is bothered by their financial success needs to consider the risks the family has taken and the incredible risk they are taking with the expansion of The Villages in the south.

(Having laid all this praise on the family and the management, I still would like to know who approved the color palette for the houses being built in the south)

Two things.
1) The developer (family, sales, marketing, construction divisions) has little to do with the day-to-day management and maintenance of the community, this is all done by a combination of the district staff, recreation department, district property management, entertainment department, and the CDD government. Once a facility or community is completed, even if they still own it (e.g. Everglades, Ezell, Franklin RCs, executive golf courses south of 44, pitch & putt, etc.) the operations and maintenance are turned over to the entities mentioned above and the costs are paid and/or reimbursed by the developer to these departments. The commercial properties are operated by a separate developer owned company, here again the "family" doesn't get too involved except in the big decisions.
2) Someone who is color blind and has never felt the joys of using a barf bag when viewing the fruits of their labors picks the colors. Just close your eyes (not while you're driving please) and take a deep breath as you pass by.

Don, I had no illusions about the Morse family personally managing every aspect of running The Villages. What they have done is to create a city and set in place the various entities required for it to operate.

Perhaps, the biggest contribution of the earlier members of the Morse family was the foresight to structure the city as a series of "villages" which bestows a sense of community among the residents. The next biggest contribution is the continuity of the houses and the infrastructure. Yes, the houses have grown larger over the years as TV moved north to south. However, the basic design has remained the same down to details such as the streetlights. The next biggest contribution was the development of the "town squares" to centralize the businesses both for the convenience of the residents; providing access by golf cart; and, the simple pleasure of being able to drive from Spanish Springs to Paddock Square without having to see convenience stores and fast food restaurants. Instead, you see roundabouts surrounded by beautiful flower beds, oak trees dripping Spanish Moss, manicured lawns, lakes (ponds), and golf courses. This is the first thing that is remarked about by every visitor we have hosted.