Archive for July 27, 2010
Should We Be Concerned About The IRS Audit?
July 27, 2010 by kayfrank.
Some members are asking, “So what if the IRS is here to audit SCA’s 2007 income tax return? Haven’t we had the best HOA auditor in Nevada and many CPA’s on our Board and Finance Committees?” How could this happen?
These articles might help answer those questions:
After intense pressure from various members since 2007, the board finally disclosed in August 2009 that it had NOT been returning (refunding or crediting) all surplus assessments as required to qualify for an income tax exemption on the “surplus incomes from membership assessments”. Accumulated surpluses from over-charged assessments since 2002 was reported to be close to $5 million and growing.
surplus-build-up-2002-2009.pdf
The qualified people I know believe that all of that money should have been returned/refunded each year to SCA members. Since 2007, many competent SCA members have expressed concern to the Board and to the auditor at what has appeared to be a violation of IRS rules and tax laws, but all comments and recommendations have fallen on deft ears.
If the board, auditor and attorney have been perfectly correct all along, why have they refused to explain their rationale to concerned members? And, if the audit goes poorly, SCA members may see most of their money wasted on paying taxes, interest, penalties and professional fees instead of receiving credits to their accounts.
Meanwhile, we should remember that such IRS business audits can take months to complete and years to settle–if the board decides to challenge the findings in court. We will just have to wait and monitor the monthly attorney and auditor billings for signs of progress.
Use the “search” tool for “audit” at the bottom left of this screen to find all of the relevant Anthem Voice Blog articles since 2007. There are other related articles on the Anthem Today and Anthem View web sites and they also have search tools.
Kay Frank
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