IRS rejects Sun City Anthem challenge of tax assessment

The Internal Revenue Service has denied a Sun City Anthem homeowners association appeal of a $1.35 million tax assessment, HOA president Jim Long said Monday.

Sun City Anthem received notice late last week that the IRS officer assigned to the administrative appeal of the 2007 tax audit has denied the appeal and upheld the findings of the IRS examiner.

Long said he expects the IRS to issue a statutory notice of deficiency within the next several weeks. Sun City Anthem will then have 90 days to file a petition for judicial review of the IRS decision.

"We have asked the Ad Hoc IRS Audit Task Force appointed at the May board meeting to recommend a course of action for consideration at the February board meeting," Long said in an e-mail message to the community.

The major area of error appeared to be that Sun City Anthem had overcharged annual member assessments and failed to refund the surplus to members, and failed to pay income taxes on the retained surpluses.