We have been providing updates on litigation surrounding the Corporate Transparency Act (“CTA”), a new federal law requiring community associations (and other companies) to report information on their “beneficial owners” with the Financial Crimes Enforcement Network (“FinCEN”), which we first wrote about here. We most recently wrote here about a December 23, 2024 decision by the United States Court of Appeals for the Fifth Circuit which granted the government’s emergency motion for a stay pending appeal, which had the effect of reinstating the requirements of the CTA after a previous court decision had effectively put the requirements on hold.
Now, we can report that, as of the date of this article, the CTA’s requirements are suspended again! On December 26, 2024, the United States Court of Appeals issued an order providing that the merits panel of the Court now has the appeal, which remains expedited, and a briefing schedule will be issued, but that the prior order’s stay of the preliminary injunction is vacated.[3] This means, unless and until further order, the CTA and its reporting requirements are not in effect. Corporations, including community associations, are not currently required to provide beneficial ownership information.
FinCEN has issued an alert reaffirming that in light of the recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, FinCEN provides that reporting companies may continue to voluntarily submit beneficial ownership information reports.[4]
Regular readers of our articles regarding the CTA litigation will recognize this familiar refrain: We cannot say with certainty how the court(s) will rule upon further appellate review of how those rulings may impact the filing requirements or additional deadlines. The current pause on the CTA’s reporting requirements could be permanent, or it could be reversed and reinstated again. For community associations interested in filing voluntarily to avoid potential headaches in the future, our firm remains prepared to file your beneficial ownership information with FinCEN for compliance with the CTA. You can provide your reporting information over a secure platform.
There, the association’s representative can provide the association’s beneficial owners information to enable our firm to compile and submit to FinCEN. All information submitted will be contained in a secure portal within our firm. Filings would be billed pursuant to our firm’s hourly fee schedule with your community association.
Our firm will continue to closely monitor the status of the legal challenges to the CTA. We will continue to update our blog accordingly.
Our attorneys at McCabe, Trotter & Beverly, P.C. are well-equipped and prepared to assist your community association with CTA compliance. Please contact us at (803) 724-5000 for further information.
McCabe, Trotter & Beverly, P.C. blogs and other content are for educational and informational purposes only. This is not legal advice and does not create an attorney/client relationship between McCabe, Trotter & Beverly, P.C., and readers. Readers should consult an attorney to understand how this information relates to their personal situation and circumstances. You should not use McCabe, Trotter & Beverly, P.C. blogs or content as a substitute for legal advice from a licensed attorney.
[3] Texas Top Cop Shop v. Garland, 24-40792, (5th Cir. Dec 26, 2024).
[4] https://www.fincen.gov/boi
Valerie Garcia Giovanoli