[Advogado]

Two new communications from the VCCDD's attorney to the IRS are now available at: Village Community Development Districts

In a nutshell: One letter asks the IRS to reverse its determination that the VCCDD is not qualified to issue tax exempt bonds. The other letter asks that, if the IRS will not reverse that determination, then the IRS only apply such determination prospectively.

Either outcome would be good for Villagers.

[Warren Kiefer]

Originally Posted by mikeod

I believe the VCCDD is a board comprised of representatives of the owner of the town squares, I.e., the developer, not the residents. That appears to be the central problem the IRS has with the tax-free bonds. Essentially, there is no path for resident input or control within the VCCDD, thus the ruling that the VCCDD is not a political entity with the ability to issue tax-free bonds.

Essentially the bonds were issued to purchase amenities from the developer by a developer controlled board with the profits going to the developer. To me it appears to be a mechanism for the developer to change ownership while still exercising control and profit at the same time.

Understand, I live here and like it here. Should the IRS dispute have never happened, I would not have given the transfer a second thought because the successful result of the lawsuit set a precedent for transfer of amenities that seems to ensure their continuation.

From the district website:
Governance of the Village Center Community Development District is accomplished by a five member Board of Supervisors, elected biannually, as described in Chapter 190.006, Florida Statutes. Inasmuch as there are no residential properties contained within the boundaries of the Village Center Community Development District, members of the Board of Supervisors will continue to be elected by the landowners of property within the boundaries of the District.

I have followed the VCCDD thing for years. At the outset the relationship where a governing board (the VCCDD) is elected by a developer (the only landowner in the VCCDD area) which board issues bonds and purchases amenities from the developer. Simply put the Developer appoints the board, the board issues bonds, the board buys property from the developer, the developer gets the profits. If that doesn't sound like a sweetheart deal nothing does !!!! No resident ever will play a role in these transactions.

[graciegirl]

Originally Posted by Warren Kiefer

I have followed the VCCDD thing for years. At the outset the relationship where a governing board (the VCCDD) is elected by a developer (the only landowner in the VCCDD area) which board issues bonds and purchases amenities from the developer. Simply put the Developer appoints the board, the board issues bonds, the board buys property from the developer, the developer gets the profits. If that doesn't sound like a sweetheart deal nothing does !!!! No resident ever will play a role in these transactions.

Ah yes my friend, but every resident here benefits from them, including you and me....

I don't see anything broke around here.

I do see a lot of people not happy with successful big business.

[Advogado]

Originally Posted by graciegirl

Ah yes my friend, but every resident here benefits from them, including you and me....

I don't see anything broke around here.

I do see a lot of people not happy with successful big business.

I think that you are missing the point.

I don't think anybody (at least not me) is saying that the present lifestyle in The Villages is broken. There is concern that it may break if the VCCDD is unsuccessful in defending the actions of itself and the Developer in utilizing tax-exempt bonds to develop the Villages.

In the meantime, it is ironic when one thinks of the millions of dollars that the Developer gives to conservative causes and candidates while taking tens, if not hundreds, of millions of dollars in corporate welfare via the utilization of taxpayer-subsidized tax-exempt bonds.

[rp001]

Originally Posted by Advogado

I think that you are missing the point.

I don't think anybody (at least not me) is saying that the present lifestyle in The Villages is broken. There is concern that it may break if the VCCDD is unsuccessful in defending the actions of itself and the Developer in utilizing tax-exempt bonds to develop the Villages.

In the meantime, it is ironic when one thinks of the millions of dollars that the Developer gives to conservative causes and candidates while taking tens, if not hundreds, of millions of dollars in corporate welfare via the utilization of taxpayer-subsidized tax-exempt bonds.

I totally agree....Subsidized wealth accumulation

[ilovetv]

Originally Posted by Advogado

I think that you are missing the point.

I don't think anybody (at least not me) is saying that the present lifestyle in The Villages is broken. There is concern that it may break if the VCCDD is unsuccessful in defending the actions of itself and the Developer in utilizing tax-exempt bonds to develop the Villages.

In the meantime, it is ironic when one thinks of the millions of dollars that the Developer gives to conservative causes and candidates while taking tens, if not hundreds, of millions of dollars in corporate welfare via the utilization of taxpayer-subsidized tax-exempt bonds.

Add to the accusation developers buying favors on both sides of the aisle. Google:

Del Webb federal land exchange deal Nevada senator

[graciegirl]

Originally Posted by Advogado

I think that you are missing the point.

I don't think anybody (at least not me) is saying that the present lifestyle in The Villages is broken. There is concern that it may break if the VCCDD is unsuccessful in defending the actions of itself and the Developer in utilizing tax-exempt bonds to develop the Villages.

In the meantime, it is ironic when one thinks of the millions of dollars that the Developer gives to conservative causes and candidates while taking tens, if not hundreds, of millions of dollars in corporate welfare via the utilization of taxpayer-subsidized tax-exempt bonds.

Freudian...?

[rubicon]

Originally Posted by mikeod

I believe the VCCDD is a board comprised of representatives of the owner of the town squares, I.e., the developer, not the residents. That appears to be the central problem the IRS has with the tax-free bonds. Essentially, there is no path for resident input or control within the VCCDD, thus the ruling that the VCCDD is not a political entity with the ability to issue tax-free bonds.

Essentially the bonds were issued to purchase amenities from the developer by a developer controlled board with the profits going to the developer. To me it appears to be a mechanism for the developer to change ownership while still exercising control and profit at the same time.

Understand, I live here and like it here. Should the IRS dispute have never happened, I would not have given the transfer a second thought because the successful result of the lawsuit set a precedent for transfer of amenities that seems to ensure their continuation.

From the district website:
Governance of the Village Center Community Development District is accomplished by a five member Board of Supervisors, elected biannually, as described in Chapter 190.006, Florida Statutes. Inasmuch as there are no residential properties contained within the boundaries of the Village Center Community Development District, members of the Board of Supervisors will continue to be elected by the landowners of property within the boundaries of the District.

mikeod: You are spot on and it goes deeper than what you address here.

[Mikeod]

Originally Posted by rubicon

mikeod: You are spot on and it goes deeper than what you address here.

Are you referring to the belief that the developer's family also bought up most of the bonds in question so that they profit from the interest paid on them tax free as well?

[Advogado]

Originally Posted by mikeod

Are you referring to the belief that the developer's family also bought up most of the bonds in question so that they profit from the interest paid on them tax free as well?

That rumor is apparently not true. Refer to: http://districtgov.org/images/IRSupd...%20Counsel.pdf

Refer to the penultimate paragraph.

[Mikeod]

Originally Posted by Advogado

That rumor is apparently not true. Refer to: http://districtgov.org/images/IRSupd...%20Counsel.pdf

Refer to the penultimate paragraph.

Exactly!

[marlinguy]

As someone who at the moment is bent on moving to the inside of the Dome in the near future I have followed the IRS issue with some interest. I am curious as to how all of this came about. Didn't the Bond Issuer have a rating agency, Moody's for example, rate them for tax exempt status? Wasn't the IRS asked for an opinion BEFORE issuing? Then, when I get so dizzy contemplating a million bits of info I try to look at what's the basic issue. Tell me if I'm wrong (in a nice way please) but as I understand it, the IRS is saying that because the CCD's did not meet the requirements of IRS 103 that they weren't in fact not a qualified political subdivision and therefore not authorized to issue bonds exempt from federal tax. Is that it? Personally, based on what I have seen and read, I would have to agree but then that really doesn't make a bit of difference, does it? For me, the much bigger question is,,"What if the IRS prevails???" Does anyone know? I have read a number of IRS published case studies concerning similar outcomes and none of them sound very good. I have read a couple of "well, the Developer will just write a check", maybe, I kinda doubt it though. Replies?

[graciegirl]

Originally Posted by marlinguy

As someone who at the moment is bent on moving to the inside of the Dome in the near future I have followed the IRS issue with some interest. I am curious as to how all of this came about. Didn't the Bond Issuer have a rating agency, Moody's for example, rate them for tax exempt status? Wasn't the IRS asked for an opinion BEFORE issuing? Then, when I get so dizzy contemplating a million bits of info I try to look at what's the basic issue. Tell me if I'm wrong (in a nice way please) but as I understand it, the IRS is saying that because the CCD's did not meet the requirements of IRS 103 that they weren't in fact not a qualified political subdivision and therefore not authorized to issue bonds exempt from federal tax. Is that it? Personally, based on what I have seen and read, I would have to agree but then that really doesn't make a bit of difference, does it? For me, the much bigger question is,,"What if the IRS prevails???" Does anyone know? I have read a number of IRS published case studies concerning similar outcomes and none of them sound very good. I have read a couple of "well, the Developer will just write a check", maybe, I kinda doubt it though. Replies?

No one really knows what the developer will do. In my opinion, many FREQUENT posters (including myself) have opinions on the developer and his doings based partially on his political leanings. Over time this is what I have ascertained based on reading posts over a six year span.

Back to the issue. No one really knows. This issue has been going on for five years and some say it will be in litigation for many more. I am glad we took the chance and moved here then or we would have not had these wonderful years.

We are NOT risk takers and very planned and very conservative in our financial dealings.

It is danged impossible to know what the outcome might be. The developer had the opportunity to pay a much smaller fine in the beginning but apparently (guessing) on the advice of lawyers decided to fight it.

Now the lawyers are supposedly paid by the central district fund and there are those that say that comes from our amenities and those who say it does not.

I am a firm believer that up until now the developer and his family and his consultants have made very good decisions.

As Rubicon says. I opine...you have nothing to do but decide for yourself and your guess will be as good or bad as any of ours.

[Advogado]

Originally Posted by marlinguy

As someone who at the moment is bent on moving to the inside of the Dome in the near future I have followed the IRS issue with some interest. I am curious as to how all of this came about. Didn't the Bond Issuer have a rating agency, Moody's for example, rate them for tax exempt status? Wasn't the IRS asked for an opinion BEFORE issuing? Then, when I get so dizzy contemplating a million bits of info I try to look at what's the basic issue. Tell me if I'm wrong (in a nice way please) but as I understand it, the IRS is saying that because the CCD's did not meet the requirements of IRS 103 that they weren't in fact not a qualified political subdivision and therefore not authorized to issue bonds exempt from federal tax. Is that it? Personally, based on what I have seen and read, I would have to agree but then that really doesn't make a bit of difference, does it? For me, the much bigger question is,,"What if the IRS prevails???" Does anyone know? I have read a number of IRS published case studies concerning similar outcomes and none of them sound very good. I have read a couple of "well, the Developer will just write a check", maybe, I kinda doubt it though. Replies?

Gracie is right when she indicates that nobody can tell you, with any certainty, what the outcome will be. You are also right-- some of the potential outcomes would not be "very good".

It is possible (although it seems unlikely) that the IRS will (a) change its position and say that developer-controlled CDDs can issue tax exempt bonds, or (b) only apply the proscription against such issuance prospectively (a real possibility). In either case, there would appear to be no impact on Villagers.

However, if the IRS successfully maintains its current position, there would presumably be huge costs incurred by the VCCDD, which owns a big chunk of the amenity facilities. If that happens, the concern to Villagers is how the amenity system would have the financial resources to continue to operate. But you should understand that, even if the VCCDD loses, the IRS cannot come after the Villagers for any taxes, penalties, etc.

Exactly how all this plays out, time will tell. For a more complete analysis, go to the POA website. You should also discount just about everything that the VHA and Daily Sun have said about the matter.

[mickey100]

Originally Posted by marlinguy

As someone who at the moment is bent on moving to the inside of the Dome in the near future I have followed the IRS issue with some interest. I am curious as to how all of this came about. Didn't the Bond Issuer have a rating agency, Moody's for example, rate them for tax exempt status? Wasn't the IRS asked for an opinion BEFORE issuing? Then, when I get so dizzy contemplating a million bits of info I try to look at what's the basic issue. Tell me if I'm wrong (in a nice way please) but as I understand it, the IRS is saying that because the CCD's did not meet the requirements of IRS 103 that they weren't in fact not a qualified political subdivision and therefore not authorized to issue bonds exempt from federal tax. Is that it? Personally, based on what I have seen and read, I would have to agree but then that really doesn't make a bit of difference, does it? For me, the much bigger question is,,"What if the IRS prevails???" Does anyone know? I have read a number of IRS published case studies concerning similar outcomes and none of them sound very good. I have read a couple of "well, the Developer will just write a check", maybe, I kinda doubt it though. Replies?

I would expect that IF there was a negative effect to the Villagers, for example, if the VCCDD had to pay penalties which affected its ability to provide our amenities, there would be a class action lawsuit against the developer. And of course, we don't know what the outcome of that would be.