The IRS issued a Technical Advice Memorandum (TAM) on May 9, 2013, that the Village Center Community Development District (the "District") is not a division of state or local government, and therefore is not a political subdivision for purposes of Section 103 of the Internal Revenue Code. The IRS has taken the position that the landowners controlled the District and therefore, despite its purported sovereign powers, it was not a “division of state or local government.” The TAM has called into question the tax-exempt status of bonds issued by community development districts that are "controlled" by one or more landowners and other special districts throughout the United States that are "controlled" by one or more landowners. Here is the TAM.