[allus70]

Bond Buyer Online - IRS Rules Against Fla. CDD

[skip0358]

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.

[Billyworld]

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?

[zcaveman]

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

Z

[carm310]

Originally Posted by zcaveman

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

[rayschic]

Originally Posted by Billyworld

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?

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

BREAKING: IRS Rules Against The Villages

[mickey100]

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

[TVMayor]

From the Orlando Sentinel

IRS rules that The Villages has no right to issue tax-exempt bonds

By Eloísa Ruano González, Orlando Sentinel
June 6, 2013
The Internal Revenue Service has ruled that The Villages doesn't have the right to issue the tax-exempt recreational and utility bonds that have been crucial to the development of the sprawling retiree haven.
Last week's decision could prompt The Villages government to strike a deal to pay the taxes on the bonds. Such a prospect "has a potential negative impact on residents," said Elaine Dreidame, president of the Property Owners' Association of The Villages.
The Village Center Community Development District's major revenue comes from annual amenity fees, which help pay for upkeep of golf courses and other recreational services. About half the money goes toward paying off bonds.
Dreidame said Wednesday she is concerned that more of the amenity fees, which cannot be raised, will go toward paying off the taxes.
"I hope the developer steps up," she said, referring to H. Gary Morse, a major GOP donor and fundraiser. She added that Morse — the drving force behind the the fast-growing development of 100,000 northwest of Orlando — should "pay to get us out of this problem rather than pledge the amenity fees."
The agency's final decision, dated May 30, comes after a five-year probe into the way the CDD borrowed money. The investigation focused on $364 million in bonds the district issued between 1998 and 2003, which the federal agency could now end up taxing.
"I'm disappointed at their conclusion," said Perry Israel, a California attorney representing the district. He added the district "is currently considering what its options will be as it goes forward."
Ultimately, the burden falls on the holder of the bonds, who can challenge the decision in court, Israel said. In such cases, he said developer districts also have the option of settling with bondholders or reaching an agreement with the IRS to prevent the agency from going after bondholders.
The IRS argued in a memorandum that Morse and his family controlled the district's board and made money from the bonds. The agency also argued that a government should be accountable to the public, which then decides how the money from the bonds should be spent.
"We believe that an entity that is organized and operated in a manner intended to perpetuate private control, and to avoid indefinitely responsibility to a public electorate, cannot be a political subdivision of a State," according to the memorandum from the IRS Tax Exempt Bonds division.
A state law in 1980 gave private developers across Florida the right to establish their own governments to help pay the costs of major projects. A provision allowing for tax-exempt bonds was an important part of the legislation, which made borrowing cheaper.
Although control of the CDD board would be transferred to residents once they owned the majority of the property in the district, the memorandum states that "even after over 20 years, this has not happened … Indeed, the facts indicate that Issurer [district] was intentionally structured to ensure that this never could happen."
The memorandum was mailed to District Manager Janet Tutt, who was out sick and unavailable for comment, an employee said.
Israel said there are thousands of similar developer districts in the U.S. that could be affected by the IRS' decision. Not only does it put a "new standard" on what is considered a "political subdivision," but it also will likely make it more difficult for developers to find money to build utilities and other services, he said.

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

[gomoho]

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.

[asianthree]

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

[TVMayor]

Originally Posted by gomoho

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.

Leisureville USA: Big trouble in The Villages

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

[skip0358]

Originally Posted by asianthree

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

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

[mickey100]

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.

[TVMayor]

Originally Posted by mickey100

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?

[jflynn1]

Originally Posted by carm310

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

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. Two 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.