[ilovetv]

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 Issuer"

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

[TVMayor]

Originally Posted by Challenger

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)

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.

[andercat]

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?

[Irishmen]

Originally Posted by ilovetv

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 Issuer"

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

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.

[njbchbum]

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?

[Challenger]

Originally Posted by TVMayor

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.

not much light there

[TexaninVA]

Originally Posted by Advogado

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 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.

[Mack184]

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.

[rubicon]

Originally Posted by mickey100

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.

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

[ilovetv]

Originally Posted by graciegirl

boyhowdy.

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.

[Golfingnut]

Caution is a natural instinct that serves us well when tempered with common sense. Paranoia is a learned process that in some gets worse with age.

[TexaninVA]

Originally Posted by rubicon

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

I respectfully disagree with the notion that our immediate and best course of action is to “sue the Developer.” Mistakes and various other Developer imperfections notwithstanding, our community would never have grown into what it has without the leadership and vision of Gary Morse. It seems to me the best way forward is, with respect to the IRS issue, for the residents’ and Developer’s interests to be aligned where possible. At least give that a chance before suing him. The IRS ruling, while unwelcome news, is also not unexpected given the bureaucratic proclivities of our beloved tax collection agency.
In any event, the Developer still has a very large stake in the success of his commercial ventures. Likewise, we (the residents) have a large stake in preserving our lifestyle and home values. Why start fighting with each other? The common opponent here is the IRS.
Thus, I am trying to put myself in the Developer’s shoes, and ask what I would do? I don’t know much about Gary Morse except that he’s in his mid-70s, is a gifted businessman / leader, and worth a billion or more. Good for him … American Dream etc. I also have to think that he has a certain level of pride and attachment to his creation.. ie TV. He spent his whole adult life building this place. My instinct, were I he, would be to contest the issue, minimize the $$ damage, and find a way to keep the community going. OTOH, if I’m mid-70s, have all the money I’d ever need and the residents of what I created immediately ganged up to “sue me” and in general, be unpleasant about it, I think I could find myself saying “to heck with it” and set a course to Barbados aboard the yacht Cracker Bay.

[ilovetv]

Originally Posted by TexaninVA

I respectfully disagree with the notion that our immediate and best course of action is to “sue the Developer.” Mistakes and various other Developer imperfections notwithstanding, our community would never have grown into what it has without the leadership and vision of Gary Morse. It seems to me the best way forward is, with respect to the IRS issue, for the residents’ and Developer’s interests to be aligned where possible. At least give that a chance before suing him. The IRS ruling, while unwelcome news, is also not unexpected given the bureaucratic proclivities of our beloved tax collection agency.
In any event, the Developer still has a very large stake in the success of his commercial ventures. Likewise, we (the residents) have a large stake in preserving our lifestyle and home values. Why start fighting with each other? The common opponent here is the IRS.
Thus, I am trying to put myself in the Developer’s shoes, and ask what I would do? I don’t know much about Gary Morse except that he’s in his mid-70s, is a gifted businessman / leader, and worth a billion or more. Good for him … American Dream etc. I also have to think that he has a certain level of pride and attachment to his creation.. ie TV. He spent his whole adult life building this place. My instinct, were I he, would be to contest the issue, minimize the $$ damage, and find a way to keep the community going. OTOH, if I’m mid-70s, have all the money I’d ever need and the residents of what I created immediately ganged up to “sue me” and in general, be unpleasant about it, I think I could find myself saying “to heck with it” and set a course to Barbados aboard the yacht Cracker Bay.

Now this is "wisdom".

Thank you so much for your insights and call for harmonious problem solving.

[janmcn]

Everybody talks about what a genius Gary Morse is for creating such a wonderful development. Did it not ever occur to him over the past decade or more that what he was doing was not legal in the eyes of the IRS? How did he reconcile this in his mind?

It seems that this is economics 101, that you can't use tax-free bonds in a profit making enterprise.

[Bucco]

Originally Posted by janmcn

Everybody talks about what a genius Gary Morse is for creating such a wonderful development. Did it not ever occur to him over the past decade or more that what he was doing was not legal in the eyes of the IRS? How did he reconcile this in his mind?

It seems that this is economics 101, that you can't use tax-free bonds in a profit making enterprise.

Appears that Walt Disney missed your economics 101 class.

This is not as simple an issue as most make it to be. I know nothing was done in secret....everything was on the table, and as one poster stated..this is complicated..those rushing to judgement to post what they just simply KNOW is right, are just WRONG.

This is neither support for or against the developer in anyway...above my pay grade. I do recall about 13/14 years there were free classes to explain it all, and to my knowledge nothing was hidden nor any question left unanswered.