California Homeowners Association Receives Tax Exempt Status

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) October 19, 2011 -- Porter & Company, CPAs recently received notice from the IRS that an application for a homeowners association in California has been approved by the IRS for tax exempt status under Code Section 501(c)(4). This is the first instance in where we assisted, but did not prepare the initial application. The application was prepared by a retired CPA who is the treasurer of the Association. When the application was initially denied by IRS, that treasurer then turned to us for help.

The first order of business was to completely restate the application to overcome poorly stated positions, and the second order of business was to add language to directly address several important issues that had not been addressed in the initial application. As this treasurer learned, it would have been both easier and less expensive had we been engaged to prepare the application to begin with, and would have spared him a lot of indigestion in dealing with the IRS.

This master association only has some 500 lots, but the Association is not gated, and maintains common areas, primarily trails and paths, that are open to the general public. Because of the unique geography of this Association, maintenance costs of these trails and the hillsides has amounted to several million dollars over the years.

Tax refunds claimed for the tax years open under the statute of limitations far exceeded all costs related to the filing, and the Association’s future tax savings are substantial each year.

Porter and Company, CPAs has prepared more tax exemption applications than any other tax professional serving the HOA industry. All exemption applications submitted that have been processed by the IRS have ultimately been approved. We usually have several applications pending at any given time. Most tax exemption applications submitted have been for associations allowing substantial public access to their common areas. However, we have also successfully gained tax exempt status for several gated associations that meet other criteria, and have successfully regained tax exempt status for several associations that had previously had their exempt status revoked by the IRS. Our expertise with the tax exemption process has benefited many associations across the country.

For more information on tax exemptions for homeowners associations, contact Gary Porter CPA at (800)304-6700 or gary@garyportercpa.com . View our website at www.501c4taxexempt.com.

More information can be found online at http://www.501c4taxexempt.com