A homeowners association (HOA) is considered a corporate entity by the Internal Revenue Service. The structure of the association does not affect the way the IRS treats it for tax purposes. It will be deemed a corporation, so your HOA must file tax returns. Filing does not necessarily mean your HOA owes taxes.
Members of the HOA board should speak with a tax professional to ensure the HOA follows all applicable rules. Beyond IRS filings, some states require returns to be filed also. There can also 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 HOA Tax Professional.
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