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Latest On IRS Bond Issue
I know how some of you feel toward Lauren Ritchie. However she just posted Part One of a Two Part Article on the latest findings by the IRS. All I will say is it is not very flattering concerning the Developer's tactics and goals and that it is not very promising. I had read her account at 5:00AM this morning and wished I stayed in bed. Ritchie does reinforce my understanding of this entire situation
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Here it is. Please check out the coulds, mights and mays
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So who represents the Residents interest in this issue?
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Well, according to the article the Villages center district has spent $644,672 (of the resident's money) fighting the IRS. They are representing the district's interest, which differs from the resident's interests. The POA keeps us on our toes communication wise, but I don't think they have the financial ability to represent us legally. So it appears no one is representing the resident's interest, legally at least. I presume if the ruling went against the district, and monies would have to be paid out out of district funds (money that came from the residents), that the resident's would have to file another class action lawsuit like they did back in 2008 to regain the money that would be rightfully theirs.
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I opine others can decide. |
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Villages developer to pay $40 million for recreation upgrades to settle a lawsuit - Orlando Sentinel ANYONE CAN SUE ANYONE. As a result of this LAWSUIT some individuals who live here apparently got a LOT of money. Elaine Driedame is the president of the POA. The developers maintain the areas and create beautiful new ones that I see south of 466 without anyone sueing them. I often wonder about that lawsuit. |
Those who think impending doom is approaching via this IRS ruling should sell now and get out.
There are many of us who have gambled the big hunk of change for our homes here who have evaluated the issue and think that we are safe from any unexpected bills. If we stay it will be handled by someone other than us, we don't vote here. If we go we can move to another place and find issues there to worry about. AND I am NOT stupid, uninformed or do I drink alcohol or take drugs. I have had LOTS of awful things happen to me just like anyone else. I am not unrealistic or in anyway being remimbursed for the things that I write on here. WHY can't I be allowed to be optimistic? I am a Republican and a Catholic. I have never been in trouble with the law except for two speeding tickets in my life. Nor has my family. I have paid taxes every year for as long as I have worked and that is about fifty years taking time off to raise our girls. We have a good credit rating and we bathe regularly. SHEESH. bump |
Center district funds come from the MERCHANTS not the residents.
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I do not see that at all when I read what happened. |
[QUOTE=graciegirl;591680]Those who think impending doom is approaching via this IRS ruling should sell now and get out.
There are many of us who have gambled the big hunk of change for our homes here who have evaluated the issue and think that we are safe from any unexpected bills. If we stay it will be handled by someone other than us, we don't vote here. If we go we can move to another place and find issues there to worry about. AND I am NOT stupid, uninformed or do I drink alcohol or take drugs. I have had LOTS of awful things happen to me just like anyone else. I am not unrealistic or in anyway being remimbursed for the things that I write on here. WHY can't I be allowed to be optimistic? I am a Republican and a Catholic. I have never been in trouble with the law except for two speeding tickets in my life. Nor has my family. I have paid taxes every year for as long as I have worked and that is about fifty years taking time off to raise our girls. We have a good credit rating and we bathe regularly. SHEESH. bump |
The residents of TV have absolutely no interest in this dispute in spite of what Ms. Ritchie would like you to believe.
You have a simple and straightforward contract with the special district (VCCDD north of 466 or SLCDD south of 466). You are obligated to pay a monthly amenity fee that can never be increased annually by more than the consumer price index and that special district is obligated to maintain the amenities in a usual and customary manor. If for any reason either of the special districts were to fail to maintain the amenities properly, then another class action suit would be brought against them just as it was a few years ago which resulted in a settlement in favor of the residents. But before any of you take too much stock in Ms. Ritchie’s ramblings, here is a post made by her in TOTV regarding her feelings about Community Development Districts: Quote:
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Apalled
GG, ahhhh, the truth finally comes out...........2 speeding tickets.....shame on you.....hang your head in shame.......say 10 Hail Marys and go to bed without your supper..:22yikes::1rotfl::1rotfl:
Just havin fun with you...you're still #1 |
Yikes.. Do I need to quit reading the TOTV?? Seriously.. great information but don't scare me like that first thing on Sunday morning, during the first full month of being a village resident.. I get a kick out of people.Doomsday is coming!!! the sky is falling..
remember.. we only have until Dec 21 and then we are all gone anyway.. Poof..or is it the 22nd?? :p |
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It could mean that the whole thing will validate that it is perfectly tickety boo and that the CDD can continue to do business in the way they have...which I hope.
The Morses had more than adequate financial resources to cover this five years ago but apparently they and their legal counsel felt it was worth standing for. It all depends whether you think that they would gamble their reputation on something shady since they have a number of legitimate ways to make money and they are making tons of it. We were one of the thousands of people who bought property surrounded by swamp lands in the center of Florida, the lightning capital of the country and where sinkholes are rampant. Damn I am glad we did. |
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As stated in the article. "The settlement includes confidentiality and nondisparagement clauses, which prevent the parties from discussing the case or criticizing Morse of the Villages". No doubt, during the Discovery phase of this litigation, less than favorable information regarding the developer and his dealings was discovered. So what the agreement did was buy the silence of the parties who sued Morse et al. Yes, anybody can sue anybody, but you don't routinely get $40 million settlement agreements unless one party feels they have a lot more to lose if the case ever went to trial, which this one didn't. No doubt at some point Morse sat down with his lawyers and discussed the worst case scenario if it went to trial, which was probably greater than the settlement amount, so they agreed on the settlement. It took a lot of courage to become a named plaintiff against someone as powerful as Morse. It's not a walk in the park being involved in this type of litigation. The 50K each was a reasonable amount for the named plaintiffs to recover and Morse bought their silence with it. |
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4.1 (g) Purchasers of Homesites further agree, .......that the owners, their heirs, successors and assigns, do not have any right, title or claim or interest in and to the recreational areas, security facilities, dedicated or reserved areas or facilities contained therein or appurtenant thereto, by reason of the purchase of their respective Homesites, it being specifically agreed that, (1) the Developer, its successors and assigns, is the sole and exclusive owner of the areas and facilities, and (2) the Contractual Amenities Fee is a fee for services and is in no way adjusted according to the cost of providing those services.I'm not trying to rub anyones face in this but it is what it is so, there's no sense fretting about it now. |
Kudos to Lauren Ritchie
In an earlier post, I mentioned that the Orlando Sentinel seemed to have lost interest in the subject. I guess I was wrong. Kudos to Lauren Ritchie for reporting objectively on a subject that is complex, but of crucial interest to Villagers. Now, if the VHA and the Daily Sun would finally do the same.
One observation about the article: It does not make the point that the potential impact on residents arises from the following. The Center Districts warranted to the bondholders that the interest on the bonds would be tax free. If that turns out not to be the case, the bondholders will sue the Center Districts for breach of that warranty in order to recover the amount of the taxes that they have to pay. (Remember that the bonds are secured by the pledge of the amenity-fee income-- another complication for the amenities system.) If the bondholders prevail, as they presumably would, the Center Districts would then become financially unable to continue to furnish the amenities. And what happens next? At that point, things really get complicated, but none of the scenarios are pretty. By the way, I hope that none of this comes to pass-- and it may well not. In anticipation of the "love it or leave it" response to this kind of post, I like it here. I don't intend to sell and leave, but I also, unlike some other posters, I do not intend to ignore the facts in regard to this subject. |
No sense fretting about it now, but ...........
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As a future Villager, I do pay attention to the IRS issue, as well as anything else having to do with the development. I like to read the articles that Lauren Ritchie writes, as well as the POA statements, and the takes by various TOTVers who keep up on the subject. The great thing about living in a country which does not supress free speech, is the ability to read and hear about all the various sides, opinions, and takes on an issue, and then making one's own mind up about how it affects them. Ritchie is no lover of the developers, but that point of view is informative, even if it may be somewhat skewed. This issue gives me NO pause when considering TV as a future (part-time) home. I have said before, and will say again, the Morse organization has built the greatest utopia for retirees known to man. That does not make them infallable, perfect, or incapable of unlawful behavior, or operating on the fringe of ethics. The only thing that I can personally judge them on is the quality of life that they have provided for me while I am in TV, and on that level they are almost flawless.
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Well said. |
Can't keep up with all these posts. But I sure wish this developer would be more open.
I also think it is good for people looking to know what is going on. Unlike us who have found all this out since we bought. I can honestly say we have so many friends here that we would never leave. However, had I known all this, I probably would of bought in a different development with a different structure of government. Just because I pay attention to the IRS issue doesn't mean I'm worrying. I'm not. Off the computer for the day. |
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If you think this form of government is a little dicey, try a development with a mandatory HOA, or a large condo association. As a previously licensed association manager in Florida, the decision to buy here was easy.
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That is what bothers me. The LEAPING to conclusions. What will happen if this all turns out to be a tempest in a teapot? THEN..there will be something else that people will cause a ruckus about because they are just jealous of the fact that the Morses are mega rich. You would think that some people had their leg amputated when the buffalo disappeared. The buffalo were there for two reasons. They were an attention getter and something to talk about on the tape...ala PT Barnum... and the presence of animals on land causes it to be taxed lower. That doesn't seem smarmy to me. But such a hue and cry. You would think they murdered Bambi. They are in the business of selling an idea and land and building houses on it. And they do it so well! |
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By the way, if the attorneys representing the developer/CDD(s) before the IRS are as successful as Gracie is in advocating for the decisions, actions and interests of the developer they should surely succeed. |
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The direct parties to the Bond Issue were the Developer and the Officers of the two Governing Districts (VCCDD SLCCD) As such any acts of ommission or commission should rest solely with them. Since the POA handled the 2008 Amneties lawsuit it would behoove residents to ask the POA to submit in writing a notification to the Developer and Two Commercial district that residents are looking to them to settle this matter should the IRS render an adverse verdict. Further the POA should let both parties know that we do want ensurances that our amentity fees are not being used to defend nor settle this matter. Finally, a copy of this notification should be sent to the IRS and the Florida Attorneys General. to stay silent is to leave the impression that we are in agreement with what the Developer and commercial did and are now doing. (ie silence equates to acceptance) Again I am only offering my personal opinion as to how we may have someone defend our financial interest, if any. |
No, the POA was not involved in that lawsuit. It was initiated on behave of several TV residents who happened to be members/officers of the POA.
As for liabilities, TV residents have none with respect to the two special CDDs. Your amenity fee as stated is a fee for services. You pay your doctor a fee for their services but you’re not responsible for their liabilities. |
Although the Internal Revenue Code makes bondholders ultimately responsible for uncollected taxes if a tax-free bond is deemed taxable, the IRS rarely does so.
As stated in Section E of an Introduction to IRS Audits of Tax-Exempt Bonds, it is the stated policy of the (IRS) TEB program to attempt to resolve violations of the Code without taxing bondholders. This is done for a couple of reasons:
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Question...I read the article in today's paper..even read it out loud to my husband to see if I understood everything correctly. Obviously, I did not. My understanding was that there were 2 CDDs specific to the IRS ruling, and was specific to bonds purchased by residents (and marketed as IRS deductible) by the Developer within a certain timeframe (prior to 2008). Is my interpretation flawed?
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(from Ritchie's article) " . . . the Village Center district won't owe the IRS a nickel — the tax burden falls wholly on the holders and the buyers of the bonds. They would have to pay taxes on the interest they collected as the loans were being repaid." |
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According to Rictchie's article "...the Village Center district won't owe the IRS a nickel -- the tax burden falls wholly on the holders and the buyers of the bonds". My question is -- the bondholders don't pay, the VC district doesn't pay, the developer doesn't pay...so does the $355 million dollars in loans just magically disappear? What am I missing here? |
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