IRS Revenue Ruling 70-604 and MCL 450.2541(2)(b): The Value of Expert Advice

Many individuals and corporations, including community associations, are currently preparing their tax returns. For associations with excess revenue this process most likely involves a determination of whether to exercise an election under IRS Revenue Ruling 70-604. A proper election under Revenue Ruling 70-604 can be used to reduce an association’s taxable income by deducting from taxable income any excess assessments refunded to members or carried over to the next year’s assessments. In making such an election, however, an association should be careful to rely upon advice given by professionals both in deciding whether to take the election and the manner in which the decision is made. A failure to do so could lead to potential liability for the association and its directors.     Read the article…………