Posted on 12/07/2013 8:20:39 AM PST by markomalley
Well, duh. Once something is in the public domain anyone can use it to “spy” on anyone else. And, of course, there is nothing to stop an IRS agent from driving by your house to look around.
Just say’in.
Without probable cause of a CRIME having been committed and a warrant based thereon, neither the IRS nor any government agency should be searching or monitoring ANYTHING as we all have the right to be left to live our lives in peace and secure in our persons and property.
Yet another reason the IRS code has to be repealed. The raising of money does not give the government authority to raise revenue in a way that involves government collecting and knowing about personal business of citizens.
What if that's the way the people of that neighborhood want it? What if the HOA was for weed and animal management or some other purpose? The IRS is not in the business of deciding what neighborhoods should look like.
Unfortunately, the author if this article picked a bad example of a case where the IRS has engaged in behavior that might be considered intrusive. A homeowners association that presents itself as a 501(c)(4) corporation has to attest to certain things when it gets its tax-exempt status. In this case it sounds like the association is going to owe a lot of money in back taxes, interest and penalties if they are lucky. The worst-case scenario is that the IRS pursues a criminal prosecution for tax fraud.
“Once something is in the public domain anyone can use it to “spy” on anyone else.”
Actually, no. Even in an audit [to verify tax information without suspecting a crime such as fraud], the IRS has to ask the taxpayer for the information pertaining to the audit, and if not forthcoming from the taxpayer they have to tell the taxpayer that they will subpeona documents from elsewhere, and what they are subpoening and from whom. They are not permitted to just collect information about a person.
The feds of any stripe do NOT have the right to build a file or spy upon a citizen where there is no authorized investigation of a crime.
I know, just say’in because it is so easy to spy on people now.
Also we are paying their salaries. If you spy on your neighbor using facebook and google map, you are doing it on your own time. Do you want to pay people to pry into your life? I don’t.
An HOA is considered a normal ("for profit") corporation unless it qualifies as a "non-profit" corporation under Section 501(c)(4) of the Internal Revenue Code. In order to qualify as a non-profit corporation the HOA has to demonstrate that a substantial part of the common areas owned by the HOA are for public use. In almost every case this involves public streets, sidewalks, bike paths and park/recreation areas, though public parking areas would also qualify if the HOA even allows parking for the general public.
Very few HOAs qualify as a non-profit corporation, because of the way master deeds restrict usually restrict the use of common areas to the owners and their visitors.
In this case, the HOA was either poorly advised by their legal and accounting professionals, or they were running a tax-evasion scheme to hide the corporation's income from the IRS.
I'd also speculate that this has been an item of dispute within this particular HOA for some time, and the HOA management may have been reported to the IRS by one or more of its own members.
“no need for a warrant because the information is in the public domain already”
I do see your point but to me it is a distinction without a difference. They have to have a valid reason to go after information about a specific person, even if such information is low-hanging fruit.
They can’t just monitor and spy on people, looking at their patterns of spending via credit cards, their associations with friends via social media and telephone records, see what their houses look like, etc., to build a file and FISH for POTENTIAL wrong-doing. We are allowed to have privacy in our spending and associations and our homes.
Intrusion is not permitted, and the easier it is for them to do so, the more vigilant we must be to violations such as these and call it what it is — a violation of the 4th Amendment.
IMHO
That does not mean that the areas in question have been subjected to capital improvements as the IRS understands them. If, for example, the area in question is a forest that was thinned for fire protection purposes, non-native plants were removed, and natives reestablished, I promise you, that does not come cheap and constitutes a capital expense and an improvement. Nor are the expenses and management overhead for maintenance insignificant.
In order to qualify as a non-profit corporation the HOA has to demonstrate that a substantial part of the common areas owned by the HOA are for public use.
I just submitted an exception to the "rule."
I'd also speculate that this has been an item of dispute within this particular HOA for some time, and the HOA management may have been reported to the IRS by one or more of its own members.
Neither of us knows that.
Yeah, my home insurer used the pictures to remove a wind mitigation for my roof citing it was not a “hip” roof by the required percentage.
It cost me 150 to have a mitigation inspector shove it up their backsides together with a complaint to the state insurance commission which said well, they did it in good faith pending the report from your inspector.
Moral, when the insurance industry pays off the state legislature with huge “support” donations, they know what they are doing. There is no justice here any longer as the O care legislation proves also. Time to go for the Gadsden Flags.
For what it's worth, I believe a non-profit organization has to re-qualify for its 501(c)(4) status periodically -- maybe even every year. So the people managing this particular HOA may have made multiple fraudulent representations about the HOA's status in the past. They should consider themselves lucky that they're only being asked to file returns from prior years.
That does not mean that the areas in question have been subjected to capital improvements as the IRS understands them. If, for example, the area in question is a forest that was thinned for fire protection purposes, non-native plants were removed, and natives reestablished, I promise you, that does not come cheap and constitutes a capital expense and an improvement. Nor are the expenses and management overhead for maintenance insignificant. Nor are the expenses and management overhead for maintenance insignificant.
These are all expenditures that would constitute legitimate deductions against an HOA's gross income when they file their tax returns.
All HOAs are required to file income tax returns, but even as a "for-profit" corporation an HOA managed (and advised) by competent people will pay very little in income taxes. An HOA is subject to special provisions under the U.S. tax code that allows it to shield most of its income from taxation, but only if its accounting work is done correctly.
point taken but all the more reason to repeal the IRS code and replace it with something that raises revenue without worrying about the streets people live on and the associations they form . . . too complicated and potentially intrusive.
IMHO ; )
My first post was not about this case. It was about whether the IRS could hold the lack of sidewalks etc. as a lack of capital improvement.
These are all expenditures that would constitute legitimate deductions against an HOA's gross income when they file their tax returns.
On the other hand, the contributors could not deduct their contributions, and there's the rub. Yet major charitable foundations make similar improvements to habitat and their owners obtain those deductions.
From what I can see in the IRS letter shown at that link, it looks like the HOA was using its tax-exempt status to avoid reporting the revenue it was generating from a golf course on its property. I'm usually not one to engage in "class warfare," but when an HOA has a freaking golf course I have a hard time generating any sympathy for them when it comes to their tax troubles.
The fact that the "contributors" (actually homeowners paying their HOA assessments) couldn't deduct their contributions is what should have been the warning flag in the first place. There's a reason why these assessments are not tax-deductible for homeowners in HOAs. If I own a detached home and I pay several thousand dollars to resurface my driveway, that repair is not tax deductible for me. Similarly, if I'm a homeowner in an HOA and I pay a tiny fraction of the cost of resurfacing a parking lot that is a common area of the HOA, then that "contribution" is not tax deductible, either.
As confusing as it may seem, the U.S. tax code is actually very consistent (from an accounting standpoint) when it comes to these things.
everyone uses Google Maps to spy on each other.
I know I do as have some of the stalker witches who occassion to visit my life.
Sadly for them, will they see is my P.O. Box.
Stoopit wenches.
I had enough of their surprise visits and vain attempts to convince me I need them in my life.
Now, I have nothing tying my actual home to any way they can find. Me.
Ping
there USED to be a line of case law tht prevented policy/investigators from using third parties to cicumvent the warrant requirments.
perhaps we do need a federal privacy amendment.
They only thing protecting us from the NSA right now is the lack of technology. But given a few years, they'll be able solve the tech problems. Then watch out.
And then allowing the IRS warranties realtime access to your bank and credit card accounts.
Na, it won't ever happen. Na. /sarc
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