CTA NATIONAL UPDATE: Corporate Transparency Act Suspended for Domestic Reporting Companies
Updated March 21, 2025, 6 PM EST
On March 21, Financial Crimes Enforcement Network (FinCEN) issued an interim final rule removing the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act. This is consistent with the U.S. Department of the Treasury’s March 2, 2025 announcement suspending enforcement of the Corporate Transparency Act against U.S. citizens and domestic reporting companies.
Under the interim final rule, FinCEN revises the definition of “reporting company” in its implementing regulations to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCEN also exempts entities previously known as “domestic reporting companies” from BOI reporting requirements.
Thus, through this interim final rule, all entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners will be exempt from the requirement to report BOI to FinCEN.
FinCEN is accepting comments on this interim final rule and intends to finalize the rule this year. CAI will participate in the public comment period on behalf of the 369,000 community associations in the United States.
This interim final rule is interpreted to mean the Corporate Transparency Act and its reporting requirements are no longer in effect for U.S. citizens or domestic reporting companies, including all applicable community associations.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.