Corporate Transparency Act Update
The Corporate Transparency Act
– What You Should Know
For a complete breakdown on the Corporate Transparency Act, you can read a detailed explanation by the American Bar Association,
an association for attorneys.
In 2021, Congress passed the Anti-Money Laundering/Corporate Transparency Act. Included as part of this legislation is required reporting called Business Ownership Information (BOI). The act was intended to detect and report suspicious corporate financial activities related to money laundering and terrorism activities.
Consequently, community associations are caught up in these new reporting requirements.
These reporting requirements place a significant administrative burden on associations and their managers, who are acting as agents.
While industry associations are advocating for the Department of Treasury to exempt community associations from these new reporting requirements, it is unclear whether their efforts will be successful. On September 10, the Community Associations Institute (CAI) filed a lawsuit against the U.S. Department of the Treasury, Secretary Janet Yellen, and the director of the Financial Crimes Enforcement Network asking federal courts to recognize that community associations should be exempt from the Corporate Transparency Act’s reporting requirements.
While the lawsuit is in process, it does not affect the Act from being a requirement on January 1, 2025.
CACM is also working with congressional leaders in an attempt to exempt community associations.
See Congressional Letter below:
Congress members request delay of implementation of CTA (deadline extended to Jan. 1, 2025).
For now, all incorporated associations should plan to file a BOI report by the deadline. Associations will need to file electronically through the Financial Crimes Enforcement Network website. The information that must be submitted includes association name, board member information (legal name, birthdate, home address, driver’s license, state ID or passport number), identity information for any other individual with substantial financial control.
The new requirements are effective as of January 1, 2024. The deadline for existing corporations to file is January 1, 2025. Failure to file could result in civil and criminal penalties and fines.