IRS Audit

The IRS completed and on site audit for the year 2015. The audit was completed in 2017 and a bit into 2018. As of today their is one open item having to do with monthly maintenance fees being taxable. The governing Master Board refuses to give any information out to homeowners, but are collecting money in all homeowners fees called a reserve assessment allocation to pay for lawyer fees to fight the IRS. As of now they have over $300,000 in the allocation. We are also being told the IRS has asked for extension of 1 year before resolution. Questions:

1. Can they legally collect this money?
2. Does the IRS ask for extensions?
3. How much money do they owe the IRS if they are willing to pay law fees that high?
4. This is all done in secret without homeowners agreeing?

I've never heard of the IRS asking for an extension - perhaps this is already in court and they asked a judge (either side could request a continuance).

As for your board, keep in mind this smells like a complicated legal matter that will likely have a lot of twists and turns before it ends, so some of your questions might not have a definitive answer at this time. There's also attorney/client privilege so some of this may not become known until after the legal battle ends. That said, your board needs to be more candid as to what has happened, so you should rally together your neighbors and demand they speak up. If you need a special homeowner's meeting where the association attorney and whoever else is working on this need to attend to answer questions, so be it. Otherwise, this really isn't the best place for questions like this.

As for the legal costs, we ARE talking about tax issues and when those commercials say don't mess with the IRS, trust and believe this isn't a good idea. You need the best counsel the association can afford, but I don't know why they're calling it a reserve assessment whatever. Reserves are a separate fund designed to help the association pay for major repairs and replacement of the common area, like roofing. Maybe they think saying "reserves" will make it sound better than "we're going to need a helluva lot of money to pay the attorneys to fight the IRS and since this blows our legal line item sky-high, this is the only way we can explain it to homeowners and get away with it.

To add to my IRS question. The Corporation is a not for profit, but it doesn't consider itself a HOA under the Florida statutes 720. It is a Master Board under Florida corporation 618. It did away with the HOA in 2002 5 months before assuming control of the park. Upon further investigation the IRS does ask for extensions including up to 1 year when the statute of limitations is running out. Adding a twist to the story the corporation or it's EIN number don't show on the IRS website. Can anyone also suggest what the average legal fee their association pays per year to their attorney? We are paying around $160,000 per year, and have a special assessment included every month for lawyer fees beyond what already is in the budget. The major problem is he Master Board doesn't have to be open to homeowners, and they don't have any over watch. The last thing is I forgot to mention that the MB never paid taxes to IRS even though besides the monthly homeowners fees they have major for profit businesses. just an update for everyone.

see if you can find the case look up in the .gov area.. for foreclosures and such the case is public records. you might be able to find the case on the internet with all the forms explaining everything you want posted there. would not let a BOD keep this information from me.

We pay about $500 per year and mainly do to liens, court actions to collect past dues. We are 112 standalone, patio homes.