The Village Center Community Development District in Florida is urging the Internal Revenue Service to allow its $427.2 million of bonds to remain tax-exempt, claiming the IRS’ finding that the bonds are taxable alters long-standing and well-settled law and should not be retroactively applied.

Perry Israel, the Sacramento, Calif.-based lawyer representing the CDD made the request in a 16-page letter to Helen Hubbard, IRS associate chief counsel for financial institutions and products, and a one-page letter to Steve Chamberlin, the acting director of the tax-exempt bond office.

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