CTA Revived

Just got this from our attorney:

At approximately 1:30pm Eastern Time on December 23, 2024, the United States Court of Appeals for the Fifth Circuit (Fifth Circuit) revived the immediate enforceability of the Corporate Transparency Act (CTA). In Texas Top Cop Shop, Inc. v. Garland, a three-judge panel of the Fifth Circuit stayed a lower court's nationwide preliminary injunction against the CTA, which was issued on December 3, 2024. This means that, among other obligations, the January 1, 2025, compliance deadline for reporting companies in existence as of January 1, 2024, is back in effect.

Good thing we already filed. Happy Holidays!

The deadline was extended to January 13, 2025, since this decision was made so quickly. But associations need to file asap. Not great timing, unfortunately.

I have recently asked Property Management company to give us a boiled down version of this requirement.

At first glance this seems to hardly apply to HOAs. We are directors but do not have 25% ownership. We do make decisions for the community.

Has anyone done the research as to the ramifications for board members who must sign this document?

The decision-making control that directors have places HOA corporations squarely under the CTA. From https://www.fincen.gov/beneficial-ownership-information-reporting-rule-fact-sheet:

Under the rule, a beneficial owner includes any individual who, directly or indirectly, either (1) exercises substantial control over a reporting company, or (2) owns or controls at least 25 percent of the ownership interests of a reporting company. The rule defines the terms “substantial control” and “ownership interest.” In keeping with the CTA, the rule exempts five types of individuals from the definition of “beneficial owner.”

In defining the contours of who has substantial control, the rule sets forth a range of activities that could constitute substantial control of a reporting company. This list captures anyone who is able to make important decisions on behalf of the entity. FinCEN’s approach is designed to close loopholes that allow corporate structuring that obscures owners or decision-makers. This is crucial to unmasking anonymous shell companies.

I'm on the board of my community and took care of reporting our info. It was very basic information (name, address, birthdate, and a copy of a current driver's license or passport).

Yes, I believe there are risks and have ranted about them on this website. In addition to the usual risks you take when handing over this information, the CTA is a new law and we have no idea how our information will be used and who will do the using. The lawsuits filed against the government cited violations of protections we are afforded by our constitution. In fact, CAI has commented in their filings that the CTA was designed to evade these protections. The CTA also authorizes our government to share the information with foreign entities of our government's choosing. These other entities may not provide the same protections as our constitution.

Regardless, I'm a firm believer in the adage "if you're guilty, you need a lawyer - but if you're innocent, you REALLY need a lawyer". Your rights are usually protected as long as you can afford to pay for securing competent legal assistance.

Unfortunately, the CTA gives concerned board members two options. Either report your info and take your chances, or risk significant civil and criminal penalties. Actually, there is a third option: refuse to serve on your association's board (and don't own 25% or more of the homes in your community).

Long story short, we just don't know. Ya reports yer info and ya takes yer chances. Or you refuse to serve on your board.

I am on the Board and also took care of reporting the info. It is indeed very easy.
For Board members who do not want to send a copy of their driver's license or passport, etc. they can easily obtain a free FinCen ID number. Privacy secured. Everybody happy.

https://fincenid.fincen.gov/landing

I used the link below to the e-filing system and did not have to create a login id:

https://boiefiling.fincen.gov/

I did have to provide my information as the person who was doing the filing (which was just a duplicate of what I had to provide as a board member).

this is a big nothing burger.

Takes 15 minutes to upload drivers license(s) and get registered.
Even if HOA does not register I predict zero HOA's will get fined over this.

Merry Christmas to everyone!