🏢 How Board Negligence Is Costing 175 East Delaware Place HOA Owners Hundreds of Thousands in Tax Losses

This year alone, $225,605 in surplus assessments will be taxed away. These funds will not be saved or applied to next year’s budget, but lost entirely because the Board again failed to hold the IRS-required Revenue Ruling 70-604 election. Despite explicit warnings in July 2023, leadership ignored the deadline. The result is a $64,309 unnecessary tax hit that owners must bear.

And this is only the beginning. The Association’s most recent tax filings show more than $1.9 million in questionable deductions, which hide at least $542,963 in unpaid taxes. By misclassifying capital expenditures, recording tax payments as “repairs,” and labeling member assessments as “capital contributions,” the Board may have delayed the financial consequences but has sharply raised the risks of an audit, IRS penalties, and greater exposure for every owner.

📉 The bottom line is that poor governance choices are draining resources that should protect property values and keep assessments stable. Owners have lost the chance to avoid this year’s tax bill, but there is still time to demand reforms that will restore transparency, compliance, and financial stability.

👉 Only subscribers receive the full forensic breakdown, including the mechanics of the $1.9 million in misclassifications, why these actions create exposure to federal and state penalties, and the immediate corrective steps that are needed.

‍