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IRS questions bonds from GOP donor development

IRS Scrutiny
Posted at 7:17 PM, Jun 05, 2013
and last updated 2013-06-05 15:19:03-04

 TALLAHASSEE, Fla. (AP) - The Internal Revenue Service is questioning hundreds of millions of bonds issued by a development district linked to a major Republican donor.


      The IRS has been scrutinizing the bonds of a community development district located in the sprawling enclave known as The Villages in Central Florida. In May it issued a memorandum concluding that the district is not a political subdivision eligible to issue tax-exempt bonds.


      The company that developed the district is controlled by GOP donor Gary Morse and his family.


      The decision could have ramifications through Florida and the rest of the country where developers rely on similar bonds.


      Perry Israel, a bond attorney representing the district, said the options include getting the IRS to change the decision - or ask bondholders to pay the taxes.