As Mr. Nielsen has suggested, I believe that the best course of action for you to pursue is to lobby the officers and directors of the HOA and alert them to the defalcation in which the CPA (and his crony officers and directors are engaged). If you have proof to back up your assertions, then I would present it the officers and directors in the form of detailed letters in an effort to induce change on their part. You can also indicate to them that if they do not rectify the problem, you will report the HOA, its CPA, and the conspiring officers and directors to IRS Criminal Investigations and/or the IRS Examination Division on the grounds that it is not complying with I.R.C. Sec. 528 and its liberal provisions for exempt function income.
Another possibility that you may want to entertain is to attempt to recall and oust the corrupt directors of the HOA, in accordance with the bylaws, and replace them with honest people. You may also want to consider running for a director position yourself, or if not, to support the candidacy of one or more of your neighbors. Then, once you have obtained a majority of honest directors on the board, they can appoint honest people to serve as officers and fire the CPA.
Depending on the amount of tax that the HOA has evaded, filing a qui tam action may not make economic sense from your standpoint. Unless you can convince the U.S. or VA governments (if the latter entity allows qui tam proceedings) to assume control over the qui tam litigation, unless you have an exceeding strong claim for waste, fraud, or abuse, you may not be able to persuade a reputable law firm to prosecute the litigation on your behalf. In addition, litigation takes a lot of time and a favorable result is not guaranteed. Grass-roots democracy also takes time but probably not as much time as litigation (unless there is no recall provision for directors in the HOA's bylaws and the directors serve for terms of more than 1-2 years).
Good luck in your efforts to clean up your HOA and throw the bastards out!
The answer to this question does not establish an attorney-client relationship. Moreover, this attorney is licensed to practiced law ONLY in the State of California. Answers to questions from users in other jurisdictions or states are meant to provide only general information. Users should contact a local attorney in their jurisdiction or state to address their specific tax issue.
Your association should have directors and officers who are required to act consistent with the association's organizational documents (bylaws, operating agreement, or other document depending on the type of entity). These governance documents coupled with state and federal law will define the "rules" by which it is governed. These same rules will define how you must proceed if you want to take action to have something changed. If you've not already done so, start with a discussion with one of the officers or directors. Then if that doesn't work, you may want to consult an attorney. Whether or not a Qui Tam action makes sense will depend on a number of factors that your attorney can also advise you on.
And it's always wise to keep in mind that you'll be dealing with neighbors who you may be living with for a long time so look for ways to resolve the situation without undue acrimony.
Evan A. Nielsen is licensed to practice law in California and handles federal tax matters throughout the U.S. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.