A homeowners association (HOA) is considered a corporate entity by the Internal Revenue Service. The structure of the association (corporation, non-profit, etc) the IRS will treat it for tax purposes as a corporation. This means that your HOA must file tax returns. Filing does not mean your HOA necessarily owes taxes. Your HOA board should speak with a tax professional to ensure it follows all applicable rules. Some states require returns to be filed also, and there can be complexities around taxation (see Form 1120-H) on investment income from any operating or reserve funds.
Your HOA will not appreciate seeing penalties or fees from the IRS if there are errors on your tax returns, so if your HOA needs advice your board should speak to a tax professional.
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