WASHINGTON — The Florida Village Center Community Development District and its lawyer are challenging the Internal Revenue Service chief counsel’s tentative decision that the CDD is not a political subdivision and its bonds are not tax-exempt.

“A conclusion that an entity is not a political subdivision because the property in the geographic area of the entity is entirely or largely owned by a single person would be a startling conclusion, inconsistent with prior cases, the Service’s own prior rulings and legislative history,” Perry Israel, the Sacramento-based lawyer representing the CDD, said in an 11-page letter to the IRS.

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