Corporate Transparency Chaos
3-21-25. FinCEN issued an interim final rule removing the requirement that U.S. companies report beneficial ownership information under the CTA. FinCEN revised the definition of “reporting company” to mean only those entities formed under the law of a foreign country and registered to do business in any U.S. State or Tribunal jurisdiction by the filing of a document with a secretary of state or similar office.
3-3-25. The new Secretary of Treasury, Scott Bessent, announced the Treasury Department will no longer enforce the CTA against U.S citizens and domestic companies. The Treasury Department is drafting an emergency rule to narrow the scope of the Corporate Transparency Act to foreign companies only. It means HOA boards no longer need to provide their personal information to the Financial Crimes Enforcement Network.
2-27-25. The U.S. Department of Treasury’s Financial Crimes Enforcement Action (FinCEN) issued an announcement saying that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current March 21, 2025, and other deadlines. FinCEN’s announcement stated that it would not take enforcement action until an interim final rule becomes effective and new relevant due dates have been passed. According to the announcement, FinCEN anticipates the interim final rule will be issued by March 21, 2025. FinCEN will solicit public comment for potential future revisions to existing BOI reporting requirements. Read the full announcement here.
2-19-25. Beneficial ownership reporting requirements are back in effect, with a new deadline of March 21, 2025 for most companies. Congress is taking action to delay CTA. H.R. 736 was introduced by Representative Zachary Nunn (R-IA-3) and S. 505 was introduced by Senator Tim Scott (R-SC). If passed, these bills will delay the act’s implementation for pre-existing entities to January 1, 2026. H.R. 736 was passed by a vote of 408-0 on February 10, 2025, and was sent to the Senate Banking, Housing, and Urban Affairs Committee for consideration, where its companion bill, S.505, was also introduced.
2-17-25. In Smith v. U.S. Department of the Treasury, the U.S. Court for the Eastern District of Texas granted a motion filed by the Treasury Department to stay the January 7, 2025 nationwide preliminary injunction on filing beneficial ownership information under the Corporate Transparency Act. This order and the January 23, 2025 order by the U.S. Supreme Court means there are currently no injunctions stopping FinCEN from requiring compliance with its filing requirements.
2-17-25. The United States District Court for the Eastern District of Texas Tyler Division granted a motion filed by the US Department of the Treasury to stay the January 7, 2025 order that issued a nationwide preliminary injunction on filing beneficial ownership information under the Corporate Transparency Act. This order and the January 23, 2025 order issued by the United States Supreme Court means there are currently no injunctions in place stopping FinCEN from requiring that corporate entities comply with the beneficial ownership information filing requirements. FinCEN has not yet updated its website, so stay tuned to see whether it will issue new deadlines to comply. A copy of the February 17, 2025, Texas District Court’s order is linked here.
1-24-25. In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
1-23-25. The US Supreme Court issued a stay on the nationwide injunction of the CTA's reporting requirements that was previously issued by the 5th Circuit District Court. It means HOAs will need to report their beneficial ownership information by the deadline established by FinCEN. We expect FinCEN to issue a new reporting deadline soon. You can read the US Supreme Court’s opinion here.
1-10-25. CAI filed an amicus brief with the U.S. Supreme Court. Read the brief here.
1-7-25. In a separate case, Means v. U. S. Department of the Treasury, the next federal judge to issue a nationwide preliminary injunction was Judge Jeremy Kernodle with the U.S. District Court Eastern District of Texas Tyler Division. He said the CTA “is unprecedented in its breadth and expands federal power beyond constitutional limits. It mandates the disclosure of personal information from millions of private entities while intruding on an area of traditional state concern.”
1-3-25. Supreme Court Justice Samuel Alito set a deadline of January 10, 2025 for the plaintiffs to submit their response to the government's application for a stay.
12-31-24. The Department of Justice (DOJ) filed an emergency application with the U.S. Supreme Court seeking a stay of the nationwide injunction or, in the alternative, a limitation of its scope to the plaintiffs in the case.
12-27-24. FinCEN reported that "In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force."
12-26-24. The decision by the Fifth Circuit's Motions Panel was appealed to a full panel of judges of the Fifth Circuit Court of Appeals, which vacated the stay the Panel had issued three days earlier. The preliminary injunction was again in effect (Read the court order here.)
12-24-24. With its reporting requirements reinstated, FinCEN imposed a new reporting deadline of January 13, 2025.
12-23-24. The government appealed to the Fifth Circuit Court of Appeals. A "Motions Panel" granted an emergency motion to stay the nationwide preliminary injunction, which reinstated CTA's reporting requirements.
12-10-24. Due to the Texas ruling, FinCEN stated that companies were not subject to liability if they failed to report by the January 1, 2025 deadline.
12-3-24. In a separate action, Judge Amos Mazzant III of the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction in Texas Top Cop Shop, Inc. v. Garland, halting the enforcement of the Corporate Transparency Act and its reporting obligations. The court ruled that the CTA was likely unconstitutional.
11-4-24. CAI appealed the court's denial of its motion.
10-24-24. CAI's motion for a preliminary injunction was denied.
4-15-24. The Community Associations Institute (CAI) met with FinCEN to seek an exemption for HOAs. Its request was denied.9-10-24. CAI sued FinCEN seeking a preliminary injunction to stop enforcement of the CTA against HOAs.
3-1-24. A federal court in Alabama ruled the CTA unconstitutional. Unfortunately, the ruling protected only the parties who filed suit. HOAs nationwide were still required to comply with the CTA.
1-1-21. Because companies doing business in the U.S. might be shell companies laundering money and supporting terrorism, President Biden signed into law the Corporate Transparency Act (CTA). The Act requires 32.6 million businesses, including homeowner associations, to report detailed, personal information about board members to the Financial Crimes Enforcement Network (FinCEN) on pain of severe penalties. They have until January 1, 2025 to submit their reports.
CTA No Longer Applies to HOAs
By the end of 2024, most homeowner associations were required to file information online with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. The 51-question initial report must be completed by January 1, 2025. The purpose of the reporting is to track suspicious activity, money laundering, and terrorist financing by small companies, including community associations. The definition of a “reporting company” includes all corporations, limited liability companies, some trusts, and other entities that are formed or registered to do business in the United States. Unless an exemption applies, a “reporting company” is any entity that is created by filing a document with the secretary of state, state corporation commission, or similar state office. Unfortunately, very few associations are exempt. Associations were required to provide (i) full legal name of the association, (ii) physical address of the association, (iii) the association’s tax ID number. Board members were required to provide (i) their date of birth, (ii) their residential or business address, and (iii) a unique identification number from an acceptable document (e.g., passport, driver’s license) along with an image of the document.
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