We have to vote on IRS 70-604 HELP!

First of all I'm sorry if this topic has already been brought up, I scrolled through and couldn't find this discussion.

We are being asked to vote on IRS revenue ruling 70-604 allows the association to move any excess funds into the following year's budget.

I don't know how to vote, YES OR NO? What's the difference?

Thank You.

That is my understanding also. A routine tax procedure.

Otherwise they are taxable.

You should vote "Yes."

The reason to vote yes is to give the HOA's tax preparer as much flexibility as possible to file either one of two tax forms and so minimize the taxes the HOA owes. Granted because of tax law, sometimes there is no flexibility.

Voting "No" will not at all necessarily result in the excess funds being taxable. It just depends. But voting "Yes" optimizes the choices the HOA's tax preparer has.

If you want the gruesome details, study this site:
https://www.davis-stirling.com/HOME/E/Excess-Income-Resolution
Then go read https://www.revenueruling70-604.com/ . The latter is not easy reading.

This is an advanced tax topic. In my opinion this forum en masse does not handle tax questions well, since the truth some members post gets buried amidst falsehoods other members post. Read the sites above.

Yes, with caveats that depend on each HOA.

But big picture: Why not completely untie the HOA's tax preparer hands? Zero harm is done by voting for the excess income resolution (which actualizes what IRS ruling says), as described at the sites I linked.

As well like 0.1% of volunteer directors understand this subject. They should do as a licensed professional tells them. Competent licensed professionals will say just have the vote each year, give a rough overview, and where allowed, have the board advise people to vote for it. Where such advocacy is not allowed (like in California), the board and HOA corporation may be screwed at times.