CTA Beneficial Ownership Reporting Requirements Reinstated
On February 17, the United States District Court for the Eastern District of Texas granted the government’s motion for stay a nationwide injunction halting enforcement of the Corporate Transparency Act in Smith v. United States Department of Treasury. The Court cited the Supreme Court of the United States’ decision to stay the preliminary nationwide injunction in the Texas Top Cop Shop, Inc., matter as precedent for their decision.
This was the last remaining nationwide order pausing beneficial ownership reporting requirements. Due to this new court order, reporting requirements under the act are reinstated for applicable community associations.
On February 19, FinCEN issued the following guidance that the Department of the Treasury recognizes that reporting companies may need additional time to comply with their BOI reporting obligations, and FinCEN is generally extending the deadline 30 calendar days from February 19, 2025, for most companies.
According to FinCEN, for the vast majority of reporting companies, the new deadline to file an initial, updated, and/or corrected BOI report is now March 21, 2025. FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.
While the fight continues in federal courts, Congress is addressing legislative initiatives to delay the act. H.R. 736 – Protect Small Businesses from Excessive Paperwork Act of 2025 was introduced by Representative Zachary Nunn (R-IA-3) and S. 505 – A bill to amend title 31, United States Code, to modify the deadline for filing beneficial ownership information reports for reporting companies formed or registered before January 1, 2024 was introduced by Senator Tim Scott (R-SC). If passed, these bills will delay the act’s implementation for pre-existing entities to January 1, 2026. H.R. 736 was passed by a vote of 408-0 on February 10, 2025, and was sent to the Senate Banking, Housing, and Urban Affairs Committee for consideration, where its companion bill, S.505, was also introduced.
Status of CAI’s CTA Lawsuit
While these lawsuits continue to go through the judicial process, CAI’s lawsuit is still in play. On Sept. 10, 2024, CAI filed a lawsuit against the U.S. Department of Treasury, Secretary Janet Yellen, and the director of FINCEN challenging the application of the act on community associations. CAI is protecting its members from the burdensome and unnecessary requirements of the act.
On Oct. 24, 2024, CAI’s preliminary injunction request was denied by a federal judge. CAI appealed the court’s denial on Nov. 4, 2024, and on Nov. 12, 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 responded to CAI’s appeal on February 7, and CAI has until February 28 to file its reply.
Access additional CAI updates and resources on the Corporate Transparency Act.
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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.