Originally Posted by bkcunningham1 (Post 576212)

Did anyone else read the short story in the Daily Sun today, Saturday, November 3, 2012, regarding the "tentative" opinion from the Internal Revenue Service that the Community Development Districts are "not political subdivisions"?

According to the story, "If the IRS were to eventually determine such a position, district bonds would no longer qualify for tax-exempt status.

"That 'tentative' opinion has drawn considerable attention across the nation. The National Association of Bond Lawyers has voiced its concern, stating that such a position 'is not supported by existing authority and could substantially undermine the market for special district bonds, a long-standing form of financing utilized by a wide range of issuers n many states.' "

The article goes on to quote Richard Lehmann, publisher of the Distressed Debt Securities newsletter, who described the potential ruling by the IRS as, "as a real can of worms" that could apply to projects across the country. "It could shut off all future issuance of bonds by CDDs and raise costs significantly," Lehmann said.

The Daily Sun article said the Village Center Community Development District attorney Perry Israel, "emphasizes that even though the IRS has reached a tentative adverse ruling in the context of the technical advice memo, it does not necessarily mean that the agency's final conclusion will be adverse."

Originally Posted by bkcunningham1 (Post 576212)

Did anyone else read the short story in the Daily Sun today, Saturday, November 3, 2012, regarding the "tentative" opinion from the Internal Revenue Service that the Community Development Districts are "not political subdivisions"?

According to the story, "If the IRS were to eventually determine such a position, district bonds would no longer qualify for tax-exempt status.

"That 'tentative' opinion has drawn considerable attention across the nation. The National Association of Bond Lawyers has voiced its concern, stating that such a position 'is not supported by existing authority and could substantially undermine the market for special district bonds, a long-standing form of financing utilized by a wide range of issuers n many states.' "

The article goes on to quote Richard Lehmann, publisher of the Distressed Debt Securities newsletter, who described the potential ruling by the IRS as, "as a real can of worms" that could apply to projects across the country. "It could shut off all future issuance of bonds by CDDs and raise costs significantly," Lehmann said.

The Daily Sun article said the Village Center Community Development District attorney Perry Israel, "emphasizes that even though the IRS has reached a tentative adverse ruling in the context of the technical advice memo, it does not necessarily mean that the agency's final conclusion will be adverse."

Originally Posted by PeteDz (Post 576245)

Can someone explain how this impacts me as a homeowner in The Villages? My Bond is Paid. :shrug:

Originally Posted by PeteDz (Post 576245)

Can someone explain how this impacts me as a homeowner in The Villages? My Bond is Paid. :shrug:

Originally Posted by graciegirl (Post 576235)

Doesn't sound hopeful.

Originally Posted by kentucky blue (Post 576311)

Gracie,unfortunately it never did sound hopeful.Some of us researched this situation like it was a final exam in college.Our conclusion was the Morse family will not win the tax exempt status,but will have to reach a settlement at some point.The IRS is not going away,and all the legal maneuvering by the Morse family lawyers will not discourage them.By the way,do you know who has been paying the legal fees to fight the IRS over all these years.........................???????????

Originally Posted by mickey100 (Post 576409)

Good point KB - yes, we the homeowners have ended up paying the legal fees. I assume at some point if the decision goes against the Morses, there may be another class action lawsuit against them to recoup any losses that residents have or will incur. For those that are not familiar with the IRS lawsuit, it contends that the districts that issued the bonds don't meet the test of a genuine "political subdivision." Its governing board isn't chosen by residents, it has no authority to exercise police power and its power to take private property for public projects is very limited.

The IRS contends that the districts' governing boards are controlled by The Villages developer, Gary Morse, and their bond sales have benefited him, not residents.:oops:

Originally Posted by 2 Oldcrabs (Post 576401)

The IRS does not like to LOSE!:rant-rave:

Originally Posted by quirky3 (Post 576410)

Can someone help explain what losses the residents may incur?

Originally Posted by Advogado (Post 576441)

First, a few observations: The situation is both complex and POTENTIALLY very serious. Anybody who tells you the contrary either doesn't understand it or is lying. The Developer-controlled Daily Sun and Villages Homeowner's Association have never explained the matter and have spun the facts in the Developer's favor. So, the only objective reporting on the matter has been contained in the POA Bulletin, which a poster in another thread was complaining about having delivered to his house, and by Lauren Ritchie in the Orlando Sentinel, who has been crucified by a number of posters to this forum.

The most complete analysis of the implications for Villagers can be found here: http://www.poa4us.org/bulletins_file...etin200908.pdf

Originally Posted by bkcunningham1 (Post 576212)

Did anyone else read the short story in the Daily Sun today, Saturday, November 3, 2012, regarding the "tentative" opinion from the Internal Revenue Service that the Community Development Districts are "not political subdivisions"?

According to the story, "If the IRS were to eventually determine such a position, district bonds would no longer qualify for tax-exempt status.

"That 'tentative' opinion has drawn considerable attention across the nation. The National Association of Bond Lawyers has voiced its concern, stating that such a position 'is not supported by existing authority and could substantially undermine the market for special district bonds, a long-standing form of financing utilized by a wide range of issuers n many states.' "

The article goes on to quote Richard Lehmann, publisher of the Distressed Debt Securities newsletter, who described the potential ruling by the IRS as, "as a real can of worms" that could apply to projects across the country. "It could shut off all future issuance of bonds by CDDs and raise costs significantly," Lehmann said.

The Daily Sun article said the Village Center Community Development District attorney Perry Israel, "emphasizes that even though the IRS has reached a tentative adverse ruling in the context of the technical advice memo, it does not necessarily mean that the agency's final conclusion will be adverse."