Our Offerings


Financial Statements


Audits are generally the highest level of service rendered by an independent CPA regarding the extent of work performed and the level of assurance given. They are performed following generally accepted auditing standards (GAAS). This service includes tests of the accounting records and other auditing procedures as the CPA deems necessary. Because a detailed examination of all transactions is not performed, there is a risk that errors, irregularities, and illegal acts, including fraud, may exist and not be detected. Under California law, community associations must, each year, have an audit or review if gross receipts exceed $75,000.


Reviews are generally the second-highest level of service rendered by an independent CPA in preparing year-end financial statements. In a review, the financial statements are subjected to analytical review procedures and inquiry as a means of ensuring compliance with generally accepted accounting principles (GAAP). In addition, under California law, community associations must, each year, have an audit or review if gross receipts exceed $75,000.


Compilations are generally the lowest level of assurance rendered by a CPA associated with the financial statements. Compiled financial statements are appropriate for those situations in which conformity with GAAP is desired without the need for greater assurance in an audit or review. In addition, California requires corporations with gross receipts over $10,000 to prepare and distribute to all owners the year-end financial statements of the corporation on an annual basis.

Agreed-upon Procedures

In this engagement, the association and CPA agree on the accounts to be looked at and the procedures performed. The CPA’s report reflects such agreed-upon scope of work in addition to their findings. This service may be appropriate and more cost-effective when a “full audit” is not necessary.



Income Tax Returns

We understand the appropriate elections and documentation requirements necessary to the most effective election of federal tax form (1120 or 1120H), as well as understanding the intricacies of federal and California income tax law and exempt organization filing requirements. However, because the articles of incorporation of your association say that it is organized as a California non-profit mutual benefit corporation, this  does not mean that the Internal Revenue Service and California Franchise Tax Board have granted your association exemption from income tax. It is next to impossible for a homeowner association to get exemption from income tax.

California Exemption Applications

How to successfully get your association an exemption from the $800 a year minimum franchise tax imposed on California corporations?

Income Tax Notices

We are experts in working with both the Internal Revenue Service and Franchise Tax Board to resolve income tax notices and the taxing authorities’ examination of previously filed tax returns. We have successfully represented more than two dozen associations with their IRS tax return examinations (also known as IRS audits).

Other Tax
Areas of Expertise

  • Federal Exempt Organization Forms 990 and 990T and California Form 109
  • Local business tax returns (San Francisco, for example)
  • Property tax returns and the frequent erroneous assessment of property tax by counties
  • Payroll tax returns
  • Sales and use tax returns
  • IRS Form 1099s
  • Tax credits such as solar energy, energy efficiency, or the fuel tax
  • Tax planning and research

Pro Forma Operating Budget and Funding Plan

Assessments and Reserve Funding Disclosure Summary

An annual California Civil Code disclosure requirement. The California Association of Realtors initiated this disclosure requirement. This document primarily summarizes the yearly pro forma operating budget and adds further disclosures on replacement reserve funding.

Per Unit Per Month Assessment Computations

It is required by the California Civil Code to be disclosed in both the assessment and reserve funding disclosure summary and the pro forma operating budget each year – for each different unit type if assessments are not equal for all units. In addition, associations with variable assessments (e.g., those that vary, in whole or in part, by square footage) must be computed each year according to the formula(s) in the association’s governing documents.

Pro Forma
Operating Budget

An annual California Civil Code disclosure requirement is the pro-forma operating budget disclosure document for California community associations and is required to be prepared on the accrual basis of accounting. Under the accrual basis of accounting, the annual wearing out of reserve components is disclosed as an expense even if there are no (cash basis) reserve expenditures projected for the coming budget year.

Replacement Reserve
Funding Plan

Information from the reserve funding plan (a 30-year cash flow projection of replacement reserve receipts and expenditures) must be disclosed in both the assessment and reserve funding plan and the pro forma operating budget. Under the California Civil Code, it is not generally sufficient to rely upon repeated disclosure of information contained in a reserve study that may have been prepared once every three years.


Expert Witness & Litigation Support Services

The partners at Levy, Erlanger & Company LLP, CPAs, have more than three decades of service in these areas, including case preparation, deposition, and trial testimony in a wide variety of areas and industries.  Concerning community associations, the most frequent service involves disputes between the association and its developer and the association and its members.