IRS Investigation - tax-free bonds

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  #31  
Old 07-10-2011, 04:59 PM
iaudit iaudit is offline
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Originally Posted by mulligan View Post
The irs/bond issue has nothing to do with amenities. The proceeds from the bond sales was used for infrastructure (water, sewer,irrigation mains,storm drains,curbs and paving). This would normally be rolled into the price of each home, but here, the expense is kept seperate in the form of a bond payment.
The IRS/bond issue has everything to do with the amenities and nothing to do with the infrastructure. The infrastructure bond is what the homeowners pay on an annual basis with their property tax bills. The irs issue has to do with the amenities that were sold to the central district and is being paid off from the amenity fees collected monthly.
  #32  
Old 07-10-2011, 05:04 PM
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That is the intent. I am told not to look to either the District or the POA to provide any detailed explanation because they haven't and they won't.
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Friend or foe you won't get a straight answer from anyone around here. Someone mentioned on another thread to read Leisureville for some insight regarding TV which is good advice before you buy here.
Hey Rube........Your predictable pessimism once again is unencumbered by facts and corrupted by snide inferences. To insinuate nefarious motives in the failure to provide a "detailed" explanation, to whine and bemoan and blame others for not getting or giving "straight" answers and to grasp at "Leisureville" as a buyer beware guide to purchasing in the Villages is outrageously disingenuous even for an affable, cynical, resident skeptic. But, with all appropriate deference ....you are our skeptic.

The IRS question in issue, at best, is dynamic and fluid to the extent that the rules and laws that apply have not been completely defined by statute or relevant court ruling. There is little or no specific case law as development districts by whatever name are evolving, modern experiments in governance. Many communities in Florida and other states are waiting patiently, not fretting, for rules, precedents and guidelines to emerge from the current efforts of legislative and judicial processes. Ergo...There is no definitive explanation to satisfy your angst, there are no canned answers that contain the elusive smoking gun you seek and Leisureville is a book.....not empirical research.

To those of you on the fence, be of good cheer and make the move. If we had waited six years ago for the perfect scenario.....we would have missed out on six years of enjoying new friends, great new neighbors, a fabulous lifestyle and what have become the best years of our lives.

In the words of Theodore Roosevelt.... It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better."

Disclosure...I do not work for the Villages....in fact, I don't work at all. I never met anyone from the Morse family.

Have a great day in the Villages.
  #33  
Old 07-10-2011, 05:26 PM
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Originally Posted by iaudit View Post
The IRS/bond issue has everything to do with the amenities and nothing to do with the infrastructure. The infrastructure bond is what the homeowners pay on an annual basis with their property tax bills. The irs issue has to do with the amenities that were sold to the central district and is being paid off from the amenity fees collected monthly.
Correct....

...and since an inquiry into the handling of the valuation of assets transferred to the CDDs is really without precedent, it is difficult to speculate on who will prevail and how that outcome will affect the other side. That being said, while buyers should do their homework on this, you may miss out on the best experience of your life for fear of the sky falling...

As Cabo's above post and mine crossed in cyberspace - with him being the winner - I have to say that I completely agree with this comment of his:

"To those of you on the fence, be of good cheer and make the move. If we had waited six years ago for the perfect scenario.....we would have missed out on six years of enjoying new friends, great new neighbors, a fabulous lifestyle and what have become the best years of our lives. "
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  #34  
Old 07-10-2011, 05:42 PM
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Originally Posted by katezbox View Post
Correct....

...and since an inquiry into the handling of the valuation of assets transferred to the CDDs is really without precedent, it is difficult to speculate on who will prevail and how that outcome will affect the other side. That being said, while buyers should do their homework on this, you may miss out on the best experience of your life for fear of the sky falling...

As Cabo's above post and mine crossed in cyberspace - with him being the winner - I have to say that I completely agree with this comment of his:

"To those of you on the fence, be of good cheer and make the move. If we had waited six years ago for the perfect scenario.....we would have missed out on six years of enjoying new friends, great new neighbors, a fabulous lifestyle and what have become the best years of our lives. "
I agree with both of you and we have just voted (again) with our checkbook.

We have bought our second home here and we think it is a very good idea.

AND we are not gamblers at all.
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  #35  
Old 07-10-2011, 06:09 PM
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Originally Posted by cabo35 View Post
Hey Rube........Your predictable pessimism once again is unencumbered by facts and corrupted by snide inferences. To insinuate nefarious motives in the failure to provide a "detailed" explanation, to whine and bemoan and blame others for not getting or giving "straight" answers and to grasp at "Leisureville" as a buyer beware guide to purchasing in the Villages is outrageously disingenuous even for an affable, cynical, resident skeptic. But, with all appropriate deference ....you are our skeptic.

The IRS question in issue, at best, is dynamic and fluid to the extent that the rules and laws that apply have not been completely defined by statute or relevant court ruling. There is little or no specific case law as development districts by whatever name are evolving, modern experiments in governance. Many communities in Florida and other states are waiting patiently, not fretting, for rules, precedents and guidelines to emerge from the current efforts of legislative and judicial processes. Ergo...There is no definitive explanation to satisfy your angst, there are no canned answers that contain the elusive smoking gun you seek and Leisureville is a book.....not empirical research.

To those of you on the fence, be of good cheer and make the move. If we had waited six years ago for the perfect scenario.....we would have missed out on six years of enjoying new friends, great new neighbors, a fabulous lifestyle and what have become the best years of our lives.

In the words of Theodore Roosevelt.... It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better."

Disclosure...I do not work for the Villages....in fact, I don't work at all. I never met anyone from the Morse family.

Have a great day in the Villages.
Cabo35. Please don't hold back. You may not work for TV but in one manner or another you are involved in this dispute and hence have read the IRS filings.

Given that you "had on the ready" a quote I made long ago leads me to conclude I am one of your targets. Hmmmmmmm

You utilize Alinsky tactics against me in order to diminish my position and hence me. skeptic, et al

You suggest that I should take at face value what is printed in the Daily Sun, Village Voice and POA.

Your claim that the dispute between the IRS and TV is dynamic is somewhat true but the IRS has clear rules that apply for a tax free bond status. Indeed they are in dispute and obviously I want TV to win but you have no right to name calling because I express a concern, a concern not created by me. You therefore may want to direct your anger at those whocreated this dilemma.

Finally you make want to mark this my comments for future attacks against me.
  #36  
Old 07-10-2011, 06:23 PM
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  #37  
Old 07-11-2011, 04:26 PM
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It is surprising how little is known about this. It sure would be nice to have a sense for what the downside risk to the home owner is, if any. Is it a dollar, a gazillion dollars or nothing, seems like on one knows. Considering the government is broke it is hard to imagine this will simply go away but who knows.
  #38  
Old 07-11-2011, 04:48 PM
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Originally Posted by graciegirl View Post
Taj

EVERYWHERE the house market is taking a bath. It is less affected here than in most places....at least now. HOWEVER who knows what will happen to our home values if some of our own residents keep trashing this area and the developers. I challenge you to find any place in this country that is more solid than this place as an investment.

I have said way too much. I get so angry when it is the same thing over and over and over.

It is true there is nothing new about the IRS.
I agree with Gracie. "EVERYWHERE the house market is taking a bath. It is less affected here than in most places....at least now. HOWEVER who knows what will happen to our home values if some of our own residents keep trashing this area and the developers. I challenge you to find any place in this country that is more solid than this place as an investment."

I am wondering how a new bond could be issued to people who have already paid for their home with cash or with a mortgage. We were told what the bond is at that time. Can they really come back and say that we now have to pay another one. It sounds to me, and I don't really know much about bonds etc, that this is between them and the IRS. The developer may be able to pass this on to new buyers, but can they apply it to us retroactively?
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  #39  
Old 07-11-2011, 05:21 PM
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No matter how you do the math and even taking the worst possible case where they decide to penalize every home owner here. Which I would believe is not possible. I also believe if the did that there would be a huge class action lawsuit. So very worst case taking the most severe IRS penalty it would be someplace between $1000 and $2000 on each Villages home.

Agree no one wants that and they would have to treat the payback over time, even the worst possible case is not worth not living here.
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  #40  
Old 07-11-2011, 06:40 PM
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  #41  
Old 07-11-2011, 06:48 PM
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No matter how you do the math and even taking the worst possible case where they decide to penalize every home owner here. Which I would believe is not possible. I also believe if the did that there would be a huge class action lawsuit. So very worst case taking the most severe IRS penalty it would be someplace between $1000 and $2000 on each Villages home.

Agree no one wants that and they would have to treat the payback over time, even the worst possible case is not worth not living here.
I agree in full.
  #42  
Old 07-11-2011, 07:00 PM
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Originally Posted by SALYBOW View Post
I agree with Gracie. "EVERYWHERE the house market is taking a bath. It is less affected here than in most places....at least now. HOWEVER who knows what will happen to our home values if some of our own residents keep trashing this area and the developers. I challenge you to find any place in this country that is more solid than this place as an investment."

I am wondering how a new bond could be issued to people who have already paid for their home with cash or with a mortgage. We were told what the bond is at that time. Can they really come back and say that we now have to pay another one. It sounds to me, and I don't really know much about bonds etc, that this is between them and the IRS. The developer may be able to pass this on to new buyers, but can they apply it to us retroactively?
1. As I understand it, the dispute for now does not involve the developer. He sold his property to the Districts and they borrowed the money to pay him using the tax free bonds that the IRS is looking at. The dispute is between the districts and the IRS.
2. IF the districts lose the IRS fight, and they cant pay it with amenity fees, they could have to sell amenities to pay the penalties and or the cost of refinancing with taxable bonds which cost more.
3. I do not consider the fact that there is a limit on the amenities fees as a plus. If the cost (Attorney fees and losses IF any) of the IRS dispute or just the ORDINARY cost of providing or maintaining amenities rises to the point where a raise in the amenities fee is needed but not allowed, there could be less amenities by necessity. Is that what villagers want? I doubt it.
4. I do not consider the IRS issue a deal breaker, just something I should know about and consider.
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  #43  
Old 07-11-2011, 10:38 PM
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It has been correctly noted in this thread that the IRS has defined rules for tax free bond status including political subdivisions that can issue tax exempt bonds. It does not offer rules that define the status of recently evolving Community Development Districts (CDD's)and Community Center Districts. (VCDD's) Therein lies the rub. This gray area exists for copious reasons cited previously in this thread. I suspect current Florida law, further clouds the issue and may in some cases be inconsistent with IRS regulations in areas of defining what is a political subdivision.

A central issue in the dispute is whether the VCDD's qualify as a political subdivision for the purpose of issuing tax exempt bonds. A compelling case that they qualify is made in the Villages submissions found in Bill-n-Brillo's very informative post in this thread. Some points to consider are:

Each district is governed by a board of elected supervisors after a
certain population is reached

CDD's are treated as special districts under Florida law.
Accordingly, they are subject to laws governing public officials and
interestingly they possess sovereign immunity.

VCCD's operate a public safety department that includes fire and
emergency medical services. It also maintains a Community Watch.
These are two ingredients of a public entity.

There is an entire list of components that define a political subdivision and a dearth of conclusive definable rules that would establish precedent. The Villages, in spite of their unique form of governance, seem to signifcantly comply with what defines a political subdivision contrary to the IRS's opinion. Hence, we have a dispute with the IRS.

I have completely understated the complexity of the IRS dispute. Perhaps someone else would like to expound on important points I have not included in order to save keystrokes and not put the reader to sleep with boring legalese. The input of those more knowledgeable is welcome.

My hope is that this post will put into perspective the nature of the beast and render him not as ominous as some have made it. I learned a lot from all the contributors on this thread and other relevant threads. It is my belief that the more we understand the nuances of the legal metamorphosis our fledgling, creative, governance system is going through, the less intimidating it becomes. Knowledge significantly reduces the fear of the unknown.

Be sure to take a hard look at the most recent references in Bill-n-Brillo's post.

Last edited by cabo35; 07-12-2011 at 06:43 AM.
  #44  
Old 07-12-2011, 03:47 PM
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Originally Posted by SALYBOW View Post
I agree with Gracie. "EVERYWHERE the house market is taking a bath. It is less affected here than in most places....at least now. HOWEVER who knows what will happen to our home values if some of our own residents keep trashing this area and the developers. I challenge you to find any place in this country that is more solid than this place as an investment."

I am wondering how a new bond could be issued to people who have already paid for their home with cash or with a mortgage. We were told what the bond is at that time. Can they really come back and say that we now have to pay another one. It sounds to me, and I don't really know much about bonds etc, that this is between them and the IRS. The developer may be able to pass this on to new buyers, but can they apply it to us retroactively?
The 2003 Bond Issue discussed in this thread is a separate from the bond you paid when you purchase your house.
  #45  
Old 07-12-2011, 06:04 PM
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Smile Thanks for the information

I started this thread what seems like ages ago in February. 3 feet of snow on the deck. Gray skies. Another beautiful day in Ohio.

I want to express my sincere thanks to the many people who spent considerable time and effort providing information re the IRS.

My husband and I are visiting TV in September and are looking forward to the visit. Still not sure about the IRS situation but at least I know how things stand right now. Can't wait to see what all the excitement is about!
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