Florida ‘Dirt Bonds’ Under Inquiry by IRS in Muni-Debt Probe
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The Internal Revenue Service is investigating whether districts set up to finance projects such as real-estate developments with tax-exempt bonds ran afoul of U.S. rules, according to a bond filing.
The IRS is auditing so-called dirt bonds sold in 2007 by the Stoneybrook South Community Development District, a special entity set up to finance infrastructure for a development by a unit of Lennar Corp. and a Florida partner, according to bond filings. The securities, backed by assessments on property owners, defaulted amid the real-estate crash.