I.R.S. Rules Against The Villages
 

I guess after all the heat the IRS is in they had to do something to save face. We'll have to wait and see what happens and who and how much has to be paid.

What this means?
 

I wonder if this is part of this IRS scandal that seems to be getting bigger? What does this mean for us residents in The Villages? Do we get sucked in to paying for whatever mistake was made by whoever?:shocked:

There is a small article in the Daily Sun Business section on this.

Z

Can you share more information for those of us outside the bubble at this time? : D

Too early to tell. Here's a link to another article about the issue.

BREAKING: IRS Rules Against The Villages

Class action lawsuit against the Developer seems likely should The Villages be required to pay.

From the Orlando Sentinel
 

From the Orlando Sentinel
IRS officials: Villages not a "government" that can issue tax-exempt bonds - OrlandoSentinel.com

Can anyone clarify this for me - are the bonds in question those for the amenities or do they also include the infrastructure bonds for roads, utilities, etc.

i think a wait and see not going to worry about something i have no control of

Leisureville USA: Big trouble in The Villages

Leisureville USA: Big Trouble in The Villages (Part 2)

Agree, if Moorse and his legal team can't beat them, just wait & see. I'm not going anywhere !!

I'm sure they'll try to draw out the process with endless appeals, but eventually the appeal process will end and someone will have to pay the proverbial piper.

Was not the draw out the last five years? Did the fat lady not just sing?

To All the press outside of the Villages

Thank you for printing The Real Story.We do not get to read about the real story because it is never told in the Villages News publication The Daily Sun. T:bigbow::mademyday:wo months ago the headline was the problem was all solved. I wonder who is going to end up paying for this. and who has been paying for the legal fees associated with the defense of this IRS issue all along.

When you begin to peel away at the onion, The Villages Friendliest Hometown motto is really not so friendly and really is just a fantasy.

"it's not over until it's over". Yogi said that! I'm not an attorney (neither was Yogi) but there are so many unanswered questions....... Examples: What about all the other CDD'S in Florida? I don't think you can treat them any different. What about the bonds issued since 2003? Etc. etc. Nope, this is far from over IMHO.

Unfriendly or friendly is not involved here. It is how monies are handled and collected and dispersed in a CDD form of government.. ...now the IRS seems to be deciding that the municipal bonds issued by CDD are not tax exempt. And that the Morses gained from this. Hello....

What was printed some time ago in the Sun was that the developer sold entities to the CDD that were underpriced. That was considered a good move and one that favored CDD's. We aren't the only CDD in Florida.

What the IRS ruled is that CDDs can't really continue as the Florida law that set them up allowed for many years.

We are now going to have to wait and see.

My guess as to what will happen is that there will be further negotiation and that the amount assessed will be lowered after a lot of lawyers will see that these conversations go on and on.

The Orlando Sentinel and Lauren Ritchie in my opinion has frequently offered stories on The Villages that have been very unfavorable and sensational. I don't know why, but it could be the editorial slant partially and the journalistic style which seems to me to be much more sensational than I consider responsible reporting.

Following will be posts by the same old people who bash the developer gloating and the same old people who think positively of the developer defending.

And eventually it will all come out in the wash.

It will put the kebash on the sales and growth and worth of our homes until it is resolved in my opinion.


NO ONE knows what the lawyers for the IRS and the lawyers for the villages will end up doing. The IRS is really on the hot seat these days about targeting certain groups. I am not suggesting that is what happened here but it won't help their reputation that Morse gives huge sums to that same party. I can't say the word or this post will be deleted.

Visit This site.

BREAKING: IRS Rules Against The Villages

This whole debacle didn't occur because of one political party being picked on, it happened because Morse and his people "stretched" and worked around the rules, and they got caught. Simple as that. I'm guessing most of the CDD's in other parts of the state do not work like the one here in The Villages, so this will act as a warning to other CDD's - abide by the intent of the law. The Villages clearly did not do this even after previous warnings.

I have heard this opinion before and I respectfully do not agree. I have not heard of any law bring broken.

This sums it up nicely without getting into the details.

IMHO it might be better to rent than buy to stay off the hook until this is finally settled which may be 10 years from now.

I wonder, could an Agency as Patriotic and honest as the IRS make a mistake in judgment i.e. the ruling they came to about this bond issue?

yeah - just a guess.

and i could guess that if bonds had not been sold, home buyers would have had their share of infrastructure costs added straight into their purchase price...and that if this suit is ultimately lost by the developer that they just might be assessed that amount straight away!

but that's just a guess.

Guessing?

:boxing2: A very thoughtful approach. This issue is so complicated that most of us don't have enough correct information or knowledge to intelligently discuss it. I do know this much about the IRS. If you call three people at the IRS and ask the same question to each----you will very likely get three different answers. Say no more!!

Lauren Ritchie’s latest article is dated June 4, today is the sixth, the title is “Fruitland Park commissioners should remove police Chief Terry Isaacs as interim city manager”. People like to blame Lauren Ritchie for generating bad info on the IRS problem but LR had nothing to do with the multiple news releases today.

Everybody - and every group - wants to be tax exempt. Irregardless of who, or what they are or do.

It's always the other guy who should pay - but not me.

I have seen nothing on this thread that indicates anyone posting here has an understanding of this process. The opinions being expressed appear mostly to be by people who have never been involved in issuing bonds of any kind nor in legislation or litigation relating to bond issues

Most often legal advise is worth about what you pay for it.

My guess is that the process has many years to run before it is settled. My previous experience is that the Bond Underwriters and the Attorneys on whose opinion the Underwriters and buyers relied have more immediate issues to deal with ( ditto their malpractice insurers)

I think you may not be clear on the fact that the bonds under IRS examination are not the infrastructure bonds attached to our houses. The bonds under examination were all issued by the Center Districts. The Center Districts used the proceeds of most of the bonds to pay the Developer (at what the IRS alleges were artificially inflated prices) for the amenity facilities.

Therefore, contrary to your post, Villagers cannot be directly assessed for the costs involved here. This is because the Center Districts can only tax within their boundaries, which do not include residents and cannot raise the amenity fees in excess of the CPI. Instead, the risk to Villagers is that IF the IRS investigation results in the Center Districts incurring huge costs, the Center Districts may not be financially able to continue to furnish the amenities to us. For a more detailed explanation, go to the POA website: http://poa4us.org/bulletins_files/bulletin200908.pdf

For accurate information, forget most of what you read in the Daily Sun and VHA Bulletin and look to either the POA Bulletin or to publications outside The Villages.

A final point regarding the concern expressed by some posters that the IRS actions here are politically motivated-- because of the Developer's large donations to the Republican party: The IRS investigation was begun under the Bush administration-- which, while it indicates nonpartisanship, is an indication of how long the investigation has dragged on.

While my above explanation is a simplified one, I hope it clarifies a little bit this complicated situation.

I don't think so. The IRS ruled on an IRS regulation. Isn't the next step to go to the courts?

Advogado's first sentence above is a key factor of which many are not aware.

This is informative on page 9 of the VCCD IRS Update of May, 2012:


The Center District is a local unit of special-purpose government of the State of Florida, created in accordance with the Act pursuant to Ordinance 92-06 adopted by the Town of Lady Lake, effective August 17, 1992, attached as Exhibit D.....

....The Center District, which is comprised of commercial property, as originally established, encompassed approximately 169.56 acres of land, located entirely with the jurisdictional boundaries of the Town of Lady Lake, Florida in Lake County. There have been various boundary adjustments to reduce and increase boundaries, and the current boundaries encompass 166.82 acres still located entirely within the jurisdictional boundaries of the Town of Lady Lake in Lake County......The remaining acreage, approximately 162.82 acres, is developed.....

http://districtgov.org/images/IRSupd...%205-17-12.pdf

And the two front-page articles of this other POA Bulletin of April, 2009 are highly informative also:

"Investigation of Bonds by the IRS Continues" and....

"AAC Comments on IRS - Bonds"...... See full articles at:

http://www.poa4us.org/bulletins_file...etin200904.pdf

While we are guessing my guess is the IRS has one target the CDD that shorted them tax money because they sold tax free bonds. My guess is the IRS does not give a rip about the Bond Underwriters or Attorneys or Uncle Bob’s Rock Shop for that mater.

I figure when the IRS says you Os me and you say I don’t have the money, the IRS says give me all your assets and we will sell them. Oh and after we get done with you if you want to have a word with your Bond Underwriters or Attorneys or Uncle Bob’s Rock Shop, enjoy. Now that I think of it, that’s what happened to Willie Nelson.

That’s just my personal opinion.

Who benefits from the bonds?
 

I think the issue is that tax free bonds have to be used for the public good and controlled by the public. If the developer controls them, they are for his benefit not the residents benefit. This debate does not concern the 10 CDDs that homes are in. The control of the 10 CDDs are turned over to the occupants and they elect people to run their particular district. The problem lies with the amenities CDDs. Residents do not elect and have no say in the decisions for these districts. If the public does not control the amenities, than the bonds can not be tax exempt.

What I don't understand is when the developer sells the amenities to the residents why does he continue to control them. Or who is he selling the amenities to?

Yes the issue is related to commercial property and all that but if one thinks the developer is going to pay Back taxes out of their pocket your mislead. It's going to come from somewhere and homeowners somehow will foot the bill.
I relate this to big bad govt saying they're going to take away big oil tax breaks and by doing that consumers are in the clear. That kind of money aint walking away.

thanx. avogado! read it! now gotta ask a] is this related to the earllier decision that amenities were sold at less than their real value; and 2] this is a non-binding determination, is it not?

not much light there

I think Advogado's post is very helpful. Agree that the POA has the best info on this complicated topic. Some other points:

- I'm aware of when the lawsuit started but it's difficult for me to conclude the ruling is completely objective ... the IRS needs to go after the money hence that's what they'll usually do.

- Regarding lawsuits, I think the lawyers who issued the ruling will be the more likely initial lawsuit targets

- The ultimate risk to us, the residents, would be any negative impact to the amenities and thus the lifestyle, and therefore the value of our homes. OTOH, the Developer has a vested interest in keeping values and sales high so that's a good thing. Maybe this becomes a cost of doing business for him?

in the meantime, we wait and see how this whole thing evolves.

All this amounts to is.."Let the games begin" as this now will wind it's way through court after court. I doubt Morse Industries, Inc. is going to just say "Oh Gee...I guess we'd better pay up quick". This is just the beginning. Stand by for appeal after appeal. Many of you won't even be alive by the time this gets all the way through the court system.

mickey100: IMHO You are spot on. Most on this thread cite as references articles in various newspapers, bulletins, newsletters. None have referenced The Notice Of Proposed Issue dated january 20, 2009 issued by the IRS.

Essentially this three part notice alleged that the sell of property and future stream of income to the Districts from the Developer was controlled by the Developer and alleged to be over-stated.. I do not know if those allegations are true or untrue. However, if true they may well bode poorly for residents.

Further the IRS alleged that while there was a physical transfer of property rights the Developer in various ways continued control. Owns the commercial rights, the county commissioners, etc. all essentially amounting to ownerships rights or voting rights. Hence the tax exempt bonds based on the fact that of the status of a political subdivision as defined by the IRS was ignored by the Developer. Again I do not know if these allegations are true or untrue but if true then by its nature it distort the poltical sub-division definition

Prior to the January 2009 notice being made available to residents the POA was advised to notify its members, file an intervenor to protect the residents interests and demand the District notify their Professional Liability Carrier that a mistake in the March 31, 2003 bond issue was likely to be alleged. This may or may not have been the decision to be made but hopefully the POA consulted an attorney to determine present/future course of action

The leadership of both the Developer and District (VCCDD) made a number of mistakes. If a lifesuitis filed the likely defendants will be both the Developer and VCCDD because again based on the wording in the Notice of Proposed Issue the VCCDD essentially acqueisced to the Developers demands, used the Developers inspectors, accountants, etc and hence created more commom ground than not which in essentially does not bode well for residents. Again I am saying these allegation are true or untrue but if true then they complicate settlement possibilities for residents.

The POA is the only organization that is in a position to seek the advice of an attorney on behalf of the residents IMHO The POA should ask that an attorney file a lawsuit against both the Developer and the District demanding relief from both enities and that through a combination of private funds and insurance they satisify this IRS obligation. The leadership of both the Developer and District have Professional Liability Policies as well as indvidual liability policies that may provide coverage for the errors and omissions made during the 2003 Bond Issuance. As I am not an attorney this may not be the best avenue but the residents have no representation and the thought that our amenities are being used to defend and eventually settle an IRS ruling not of our making is just wrong

For those that say we should just wait well that what was said five years ago and here we are.

PS I lean on the POA because they are our only viable option.

I opine you decide

It's a free-for-all of filling in the blanks.

And the hatred for people who've earned their millions by selling all of us a normal American house that cost, in most cases, less than the one we had--without a gun to our heads--is appalling.