Corporate Transparency Act Update: What You Need to Know
Here are the latest developments regarding the Corporate Transparency Act and how it might impact community associations.
As many of you are aware, the CTA mandates that business entities in the U.S. report the identities of their beneficial owners to the Financial Crimes Enforcement Network. For community associations, beneficial owners are the volunteers serving on the board of directors.
This requirement has been met with significant resistance from community associations due to concerns about the cost, complexity, legal liability, and potential privacy issues.
In a promising development, Rep. Rich McCormick from Georgia recently introduced HR 9045, a bill that specifically seeks to exempt community associations from the CTA’s reporting requirements. This legislative move is critical, as it recognizes the unique structure of community associations and the undue burden the CTA imposes on them.
We’ve updated CAI’s call to action to give you an opportunity to contact your member of Congress, urging them to support HR 9045. Please participate by clicking here.
As reported previously, the National Small Business Association won a significant victory in an Alabama federal court challenging the CTA. This lawsuit has sparked a series of similar legal challenges across the country as businesses argue the CTA oversteps Congress’s power to regulate interstate commerce. The federal government has appealed the Alabama decision to the U.S. Court of Appeals for the 11th Circuit. Oral arguments are scheduled for Sept. 27.
NOTE: It is important to note that this court ruling does not negate the requirement for community associations to comply with the Corporate Transparency Act by Jan. 1.
In support of our members, Community Associations Institute has hired a law firm to file a lawsuit challenging the CTA. We expect to file the lawsuit sometime this summer, including a request for a preliminary injunction so community associations won’t have to comply with reporting requirements prior to the January reporting deadline.
For more detailed information and resources, including a guidance document specifically tailored for community associations, visit CAI’s Corporate Transparency Act Resource.
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Dawn Bauman, Chief Strategy Officer. As CAI’s lead advocate for federal and state legislative and regulatory affairs, Dawn works with volunteer leaders throughout the country serving on CAI legislative action and government affairs committees to advocate for strong and sensible public policy for America’s community associations.