Latest Development in the IRS Tax-Exempt-Bond Investigation
 

Page C1 of today's Daily Sun reports another unfavorable development in the IRS investigation of the dealings between the Center District and the Developer, i.e., an IRS "Engineer's Report" (whatever that is) critical of the pricing of the amenities which the Developer sold to the Center District. As you will recall, the Center District financed the purchase of those amenities using purportedly tax-exempt bonds. Among other things, the IRS claims that the purchase price was inflated and, therefore, the bonds don't qualify as tax-exempt.

Unfortunately, the Daily Sun article is written, almost certainly intentionally, so as to be incomprehensible to even relatively well informed readers. But, hey, for a change, at least the Daily Sun, even with the obfuscation, reported a development in the most-important issue facing The Villages. I guess that is progress.

Hopefully, the Engineer's Report will be posted on districtgov.org website and/or the next POA Bulletin will have an explanation.

When dealing with the IRS, their writings are usually incomprehensible to most citizens. How can you jump to the conclusion that the Daily Sun wrote the article, in an intentionally ambiguous way, to confuse the reader?

Bogie: What does it say? I am interested and I cannot find it online.

I agree Bogie.

In no way did I think it was trying to muddy the waters. In fact I was going to post just the opposite from Avogado's opinion.

Janet Tutt wrote a clear observation, at least to me.

She pointed out the errors that the IRS had made.

On the contrary, the IRS was quite clear when explaining the method used to determine income flow of the amenities, as well as the methods for appraising the buildings purchased by the VCCD when it wrote its Proposed Notice of Issues in 2009. These accounting methods were the basis for the amount of bonds purchased by the VCCD and one of the IRS arguing points. I doubt the Daily Sun, Village Voice or POA will expound on this topic...but then I could be wrong?

Big brass ones....
 

Yes sir, big brass ones !
Sorry - first thing that came to mind considering it came from a lawyer.

The article is not on line at this time.

Can you are someone else summarize what the article says?

From what I gather, it is a filing a by the IRS that states why the sale price of the property from the developer to the district was too high and thus disqualifies the bonds from being municipal tax free bonds.. and the article responds to the filing by stating the reasons they believe the IRS is incorrect? Am I right so far? Thanks for your help.

Patience grasshopper, it may be posted on the district site in a few days.

Answer to Bogie Shooter's Question
 

Bogie Shooter, have you read the article?

If you have, I am surprised that you would ask the question. But to answer it:

First, I don't think that I "jumped" to the conclusion the article is "ambiguous". There is nothing ambiguous about it, and I never said there was. In my view, calling the article "ambiguous" would give a bad name to the concept of ambiguity. My point was that the article so incredibly unclear, that (given the nature of the subject matter and the Daily Sun's history) the lack of clarity had to be intentional. Here is my reasoning:

I spent a good part of my career working on acquisitions and, although not a financial analyst, I think that I have a basic understanding of the issues involved in the valuation controversy here. Because I have a few hundred thousand dollars invested in The Villages and like to stay on top of matters that could impact my investments, I have spent a fair amount of time studying the documents involved in the IRS investigation. In other words, I know basically what's going on with the IRS investigation.

Despite my background, after reading the Daily Sun article, I have no understanding as to exactly what the new IRS Report concludes and of the basis for that conclusion. All I learned from the article is that Janet Tutt doesn't think the IRS knows what it's talking about. Her position is hardly surprising, but it is not particularly comforting (since the IRS has a special unit specializing in the investigation of municipal-bond abuse and deals with valuation questions on a daily basis). In any event, Janet Tutt's opinion hardly ought to be sole focus of a "fair and balanced" Daily Sun article on the latest development in a matter of this importance.

There is certainly no way that the typical Daily Sun reader, who knows virtually nothing about the IRS investigation or about present values of future income flows, would, after reading the article, have a clue as to what is going on or of its importance. Given the critical importance of the IRS investigation to Villagers and the Daily Sun's history of either not reporting or burying news stories unfavorable to the Developer, there is not the slightest doubt in my mind that the lack of clarity in this article is a continuation of the Daily Sun's past practice in this regard.

I agree with Gracie and Bogie.

Holy S---! I guess I was wrong.

Does anyone know much is the defense in this investigation costing villagers, is it coming from the amenities fees, and has the Developer contributed to the cost of the defense?

This is getting interesting...........again............:popcorn:

Wouldn't just be easier to go back and read all those earlier posts?