It's on, it's off, it's on, it's off again! The latest in the Corporate Transparency Act saga has the deadline suspended again pending continued legal action.

The US Department of the Treasury's FinCEN division released a statement stating that the filings are currently voluntary.

Haus Financial Services LLC continues to file reports on behalf of our clients and believes this is still the best course of action to avoid potentially heavy fines. We encourage community associations to remain vigilant regarding updates on the requirement if you have not yet filed your report or do not plan to do so until there is a final determination on the matter. 

In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline as follows:

• Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
• Reporting companies created or registered in the United States on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN.
• Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
• Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
• Reporting companies that are created or registered in the United States on or after January 1, 2025 have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.

All community associations that existed prior to 1/1/24 should file now to ensure compliance with the current 1/13/25 extended deadline.

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On December 5, 2024, an appeal was filed against the preliminary injunction put into place on December 3, 2024.

FinCEN has noted on its website that due to the current injunction, reporting companies are not currently required to file by the initial 1/1/25 deadline. However, FinCEN continues to accept BOI filings and has stated that it believes the CTA will be upheld.

While the situation continues to evolve, Haus Financial Services is encouraging clients to file now before the initial deadline to avoid any last-minute scramble. Even if the deadline is extended, the requirement may still stand. We feel it is best to check this item off your To Do List rather than to continually monitor the status of the legal actions. It may be the only filing you will need to do, but at least it will be done.

Ultimately, it is up to the board of your community association to determine whether or not to file its BOI report at this time. 

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a NATIONWIDE preliminary injunction against the Corporate Transparency Act. This preliminary injunction halts enforcement and compliance of the requirement for corporations to file a Beneficial Ownership Report by January 1, 2025.

Communication from law firm Keough and Moody states:

"On December 3, 2024, the U.S. District Court for the Eastern District of Texas entered a preliminary injunction enjoining enforcement of the CTA. In the Memorandum Opinion and Order for the Texas Top Cop Shop, Inc. case, Judge Mazzant declared that “…reporting companies need not comply with the CTA’s January 1, 2025, BOI (Beneficial Owner Information Report) reporting deadline pending further order of court.” Based upon this decision, it appears that reporting companies, such as community associations, have received at least a temporary reprieve from having to file a BOI.

With the above said, it is important to note that this situation is fluid. At the time of the drafting of this update, the Department of the Treasury has not expressed any public position on the ruling, nor has it provided an update as to the next steps (including whether it is agreeing to suspend or extend the deadline for compliance). The FinCEN website is still open for business. Given action taken in response to past adverse rulings, specifically that related to the National Small Business United v. Yellen case in the U.S. District Court for the Northern District of Alabama, we expect Judge Mazzant’s order to be promptly appealed. As a result, we caution against assuming that the CTA is dead and that filing of a Beneficial Owner Information Report is no longer needed. Action may still ultimately be required and may still be required by January 1, 2025."

Associations who have already filed their reports can rest easy, regardless of any future developments. Associations who have not yet filed their BOIR may still want to do so to ensure that they are protected should the injunction be reversed. 

The court's full opinion can be read here.