Idiocy On Parade

In one of his typically convoluted efforts to push a square peg into a round hole, blogger Ron Johnson continues to suggest that a vote of SCA homeowners would be needed if the Association decides it needs to go to the Federal Tax Court as a consequence of the adverse IRS examination finding against SCA.

Johnson correctly cites NRS 116.31088 in its reference to requiring a unit owners’ vote for the “commencement of a civil action.”

But he incorrectly suggests that appealing the IRS decision as it affects SCA to the Tax Court is the “commencement of a civil action.”

Commencing a civil action is synonymous with filing a lawsuit. You cannot commence a civil action without filing suit, because that’s what it means.

On the contrary, the right to appeal an adverse finding to the Tax Court is something allowed by the IRS in the normal course of seeing an examination finding through the appeal process, and it ABSOLUTELY DOES NOT require that a civil action be commenced for this to happen.

In a case such as ours, if it ultimately requires going to the Tax Court, it will be as part of a legal appeal process and will NOT constitute the filing of a lawsuit/civil action.

Conspiracy theorist Johnson once again demonstrates why attending law school might be a desirable prerequisite to playing lawyer.

Comments

[David W Bernstein]

David:
I think you are wrong.
The arguments now being had before taking the matte is taken to Tax Court is similar to every dispute between parties trying to settle their dispute before going to court. There, the parties argue in an attorney’s office, which process is quite similar to arguing with IRS though it may be done in their office.
Filing the petition with the Tax Court of the US is, in my mind, definitely going to court and beginning the litigation process.
There is another alternative to going to Tax Court. If you do not like their bias and constricted thinking, you can file with the Court of Claims, to have them hear and resolve the issues in dispute.
I would think that everyone would recognize that that is proceeding to litigation.
I maintain that the two are completely similar.
David W Bernstein

[David Berman]

David I will not debate the issue with you at this time, but I had significant exposure to this process during my years in the Exam Division of the IRS, and if it comes to that, you and Mr. Johnson will be proven wrong.

An appeal of an IRS decision through the Tax Court is simply not the commencement of litigation or a "civil action." It is a RESPONSE mechanism, not that of a plaintiff commencing an action.

[John Burke]

David,

Assuming the tax situation is a legal (="civil"(?), I am not a lawyer) action, do you agree with Barbara Holland's answer in Saturday's RJ to SCA's situation that "the association should provide that information to [the buyer]". (I am guessing SCA is the only 7,000-plus unit association in the valley with a current 1.3 million dollar tax dispute.)

I could not find her answer in NRS. The NRS she cites has

"NRS 116.4109 Resales of units.
1...a units owner or his or her authorized agent shall, at the expense of the unit’s owner, furnish to a purchaser a resale package containing all of the following:
...........
(d) A statement of any unsatisfied judgments or pending legal actions against the association and the status of any pending legal actions relating to the common-interest community of which the unit’s owner has actual knowledge;
..."

This clearly states that providing the information to the buyer is the sole responsibility of the seller or his or her agent, not the association.

Remember, however, Ms Holland answered who was responsible to provide information to the buyer which is not the same as an association hiding something from the seller or buyer, an issue she did not address. Could confusion over what should be disclosed and who should disclose be the reason "numerous, extemely reputable real estate agents" and he posing the original question could not find a specific law?

[David Berman]

Excellent comments and questions, John.

It's obvious that the question to Barbara Holland came from a SCA resident, as have many of the questions she receives, including from me.

I would agree that disclosure of the IRS matter to prospective buyers would be warranted and should be done, if for no other reason than to be on the safe side. For all I know, it IS being done, though I have no information on that nor has anyone I know of indicated whether the Association is doing it.

This, of course, is entirely different from the question about releasing documents the Association has stated constitute attorney-client priviege at this time. The Board has reported status of the IRS matter at regular intervals and surely will continue to do so.