(Revised)  Mr. David Berman appears to have made a really big mistake this time.

[1] He commented about SCA’s apparent plan to go to tax court to appeal the IRS audit report:

“… I had significant exposure to this process during my years in the Exam
Division of the IRS, and if it comes to that, you and Mr. Johnson will be proven
wrong.  An appeal of an IRS decision through the Tax Court is simply not the
commencement of litigation or a “civil action.” It is a RESPONSE mechanism, not
that of a plaintiff commencing an action.”

Did David Berman not previously confirm he was convicted of forging a judge’s signature
on tax documents and lost his law license?  And, did he not previously claim to have gone
to work for the IRS as a low-level, UNIX minicomputer system administrator and trainer-
-but, not as an attorney?

If so, how could he now be claiming to have been working in the “Exam Division of the IRS”
as if he had been employed as a tax attorney?  It makes one wonder if he ever disclosed to
the IRS that he was suspended from practicing law after admitting to being a forger?

As a former IRS Auditor, I had to go through extensive personal checks prior to employment.
I  doubt the IRS would have hired him or allowed him to continue being employed if it had
known about his forgery conviction.

It is also unlikely the IRS would have allowed him to participate in legal discussions or have
access to taxpayer records if he had disclosed his forgery record.  And, why would the IRS have
allowed a self-acknowledged/convicted forger and disgraced/suspended attorney to have
access to private tax records for a decade before being allowed to retire?

When I worked for the IRS, any personal history data that was discovered to be missing or
deceptively  submitted could have resulted in termination and prosecution.

So, we need to ask, why should anyone believe anything this disgraced individual says?  Do
we believe he participated in tax law discussions while deceiving the IRS about his being a
forger and having lost his law license?  Or, did he fabricate a false and/or carefully deceptive
story?

———comments added on June 25, 2011———-

By the way, I believe Mr. Berman is dead wrong by saying “An appeal of an IRS decision
through the Tax Court is simply not the commencement of litigation or a “civil action.” 
The final ruling by the IRS appeal process is truly “final” from the IRS perspective.  

The [2] United States Tax Court process is run by a totally different agency.  Going to US
Tax Court is a civil litigation action that NRS116 and our governing documents appear
to require unit owners to approve–in advance.   Ask any of our SCA retired IRS agent/
auditor members or a licensed tax authority for their opinions before accepting anything
that Mr. Berman is spinning.

In the meantime, many members believe that the board is obligated by law to fully inform
every unit owner via the “Spirit Magazine”, “Relay Newsletter” or by a special letter of the
full facts, costs of appeal, projected costs of ligation and projected “savings”.  

The board must also follow Generally Accepted Accounting Rules by establishing a special
reserve account in the 2012 budget in the event the Association has to pay the full costs of
losing the appeals and litigation actions and related court costs and lawyer fees. 

It seems obvious that the total costs of appealing the IRS audit report finding could far
exceed the initial amounts.  History shows that corporations who dare to challenge the IRS
through Tax Court have a disastrous track record (while the involved attorneys get wealthy).
For example, there is a notorious Canadian company that went to Tax Court with a $50
million liability, and emerged 10 years later with a Tax Court ruling of owing $500 Million!

Our members would be truly foolish to allow the board and its self-serving auditor and
attorneys to continue to follow the current path.   It is impossible for me to imagine a
favorable financial outcome for our unit owners.

Kay Frank