CTA NATIONAL UPDATE: Corporate Transparency Act Suspended for Domestic Reporting Companies
Updated March 3, 2025, 3 PM EST
On March 2, the U.S. Treasury Department issued a statement regarding enforcement of the Corporate Transparency Act.
The official notice says, “not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory guidelines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either.”
Further, the department said it will be issuing a proposed rulemaking to narrow the scope of the act to foreign reporting companies only.
This recent action is interpreted to mean the Corporate Transparency Act and its reporting requirements are no longer in effect for U.S. citizens or domestic reporting companies, including all applicable community associations.
We thank the many CAI advocates who contacted their members of Congress to express their opposition to the act’s reporting requirements for community associations. Your voices were heard!
CAI’S FEDERAL LAWSUIT STATUS
On October 24, 2024, CAI’s preliminary injunction request was DENIED by the federal judge in this case. While this decision was not the outcome CAI had hoped for, it does not mark the end of CAI’s efforts. CAI appealed the court’s denial of the preliminary injunction request on November 4, 2024, and on November 12, 2024, filed its opening brief of the appeal in the Fourth Circuit urging a pause on reporting requirements for community associations while this lawsuit is adjudicated. The Government filed it response to CAI's appeal on February 7, 2025. CAI filed its reply on February 28, 2025.
CAI’s other lobbying and advocacy efforts continue on Capitol Hill seeking both a one-year delay of implementation of the CTA’s reporting requirements and an exemption for community associations. The lawsuit itself is continuing to go through the legal process even as the preliminary injunction decision is being appealed.
CTA Federal Advocacy and Legislative Efforts
Act Now! Ask your Members of Congress to Delay the CTA!
Tell the Senate to support H.R. 736 and S. 505! H.R 736 was sent to the Senate on February 10, 2025, and S. 505 has nearly identical language. If passed, both bills would delay the Corporate Transparency Act’s implementation for pre-existing entities to January 1, 2026.
Act Now! Ask your Members of Congress to Repeal the CTA!
Tell Congress to support H.R. 425 and S. 100! If passed, both bills would completely repeal the CTA and its beneficial owner reporting requirements.
Corporate Transparency Act
The Corporate Transparency Act (CTA) was signed into law Dec. 2020 and is now in effect for many community associations. This law will require community associations with fewer than 20 employees and less than $5 million in annual revenue to disclose beneficial owners’ information to the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
While we support the goal of stopping money laundering and funding schemes for terrorist activity, this is not good public policy for community association boards of directors. CAI believes community associations were unintendedly caught up in this law which is intended for corporations laundering money for terrorist activity. Failure of a volunteer community association boards to comply—intentional or not—could result in up to $10,000 in fines and up to two years in prison.
CAI Files Federal Lawsuit over Corporate Transparency Act
CAI Membership
We learned from the National Small Business Association (NSBA) lawsuit that “association standing” protects all members of the organization in the lawsuit. If CAI’s lawsuit is successful in exempting community associations from the Corporate Transparency Act, it is very possible the exemption will only apply to community associations that are members of CAI.
For the time being, CAI recommends that your association sign up for a Homeowner Leader membership, Group option. Up to 15 board members may be listed under this membership option, which should be broad enough to cover the majority of community association boards.
Help CAI Fight The Corporate Transparency Act!
Relevant Advocacy Blog Posts
For additional questions on the Corporate Transparency Act please email CAI’s Government & Public Affairs team at [email protected]; or contact
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Dawn M. Bauman, CAE
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Phoebe E. Neseth, Esq.