Yet Another CTA Update

Thanks for keeping everyone informed on this.

As everyone knows, the Act requires certain businesses to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). Non-compliance can result in fines and possible imprisonment. Here's what Google AI said about the pros and cons of the Act:

Pros

Combats corruption -The CTA helps prevent individuals from hiding their assets and income using shell companies.

Improves accountability -The CTA creates a national database of beneficial ownership information, which makes it easier for authorities to track corporate ownership.

Increases investor confidence - The CTA reduces the risk of hidden ownership and illicit financial activities, which can boost investor confidence.

Levels the playing field - The CTA helps smaller businesses by improving transparency in business activities.

Cons

Burdens small businesses - Some say the CTA puts an undue burden on small businesses, especially those that don't qualify for the large operating company exclusion.

Discourages reporting -If filers can't get the information they need, they might not file on time or at all. They might also file false information to meet deadlines.

Unlevel playing field - If some businesses choose to be transparent while others don't, it can create an unlevel playing field.

I'm sure there are more pros and cons to consider, but since our focus is on HOAs, I would amend the law to delete their reporting requirements. Normally, I'd be amazed that it's taken Congress this long to see that there are parts of the legislation that should be reconsidered, but considering the people in it, I'm not.

As others have said, thank you for keeping us informed.

CAI and their lawyers in their own lawsuit filings plus the recent amicus brief filed with the Supreme Court.

Also, I imagine there is plenty in the Congressional record back when they debated the Volunteer Protect Act.

It's logical. In non-profits, the board may be paid. The director/upper management may be paid. But the day to day work is mostly done by volunteers, most of whom can't afford to risk their personal assets if things go wrong.

Volunteers also come and go with some regularity. If a non-profit is spending a significant chunk of time reporting and re-reporting every time someone leaves or someone new volunteers, they won't have enough time to do the work they were created to do.

If some or all of the work force walks off the job, how could that *not* seriously harm their ability to carry out their mission?

Well, there have several conversations on this website where people discussed board members providing personal information (SSNs and such) to comply with the law, and many are concerned about this. HOAs have enough trouble getting volunteers, as you well know - how comfortable would YOU be if you had to cough up this type of information for a VOLUNTEER position?

Then there's the risk of scams (because crooks are always looking for new opportunities - look at this information on beneficial ownership information from FinCen (https://fincen.gov/boi):

FinCen has learned of fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act. These fraudulent scams may include:

Correspondence that references a “Form 4022” or “Form 5102” is fraudulent. FinCEN does not have a “Form 4022” or a “Form 5102.” Do not send BOI to anyone by completing these forms.
Correspondence or other documents referencing a “US Business Regulations Dept.” This correspondence is fraudulent; there is no government entity by this name.
Please be on the lookout for anything that may indicate correspondence you receive is fraudulent. For example, be cautious of any of the following:

Correspondence requesting payment. There is NO fee to file BOI directly with FinCEN. FinCEN does NOT send correspondence requesting payment to file BOI. Do not send money in response to any mailing regarding filing your beneficial ownership information report that claims to be from FinCEN or another government agency.
Correspondence that asks the recipient to click on a suspicious URL or to scan a suspicious QR code. Those e-mails or letters could be fraudulent. Do not click any suspicious links or attachments or scan any suspicious QR codes.
Correspondence regarding penalties. FinCEN does NOT send initial correspondence regarding CTA penalties via e-mail or over the phone. Do not submit payments via phone, mail, or websites as requests/directions to do so are fraudulent.
Please be advised that the following statement that previously appeared at https://boir.org: “Boir.org (Beneficial Ownership Information Report) is an officially authorized service provider with the US Government or the Financial Crimes Enforcement Network (FinCEN)” was false.

Use caution when you receive correspondence from an unknown party. Verify the sender. Never give personal information, including regarding beneficial ownership to anyone unless you trust the other party.

FinCEN issued a public alert on December 18, 2024, to raise awareness of fraud schemes abusing FinCEN’s name, insignia, and authorities for financial gain—including scams that exploit beneficial ownership reporting.

You're welcome

Weeellll... that's nothing like the melodramatic (AFAIC) hyperbole posted by CathyA3 above.

If and when no one volunteers because of the CTA, you failed to address the alternative. Yes ma'am, the R-word.

I can appreciate that you think some possible volunteers would rather pay for a receiver.

I do not like the CTA for HOAs. But I disagree that it's such a horrible thing to give out the minimal identifying information (with alternatives) requested.

Since you like to start the day with snark: You too are welcome.

Boil over. Go ahead. Dare you. ;-)

What really deserves an update?

The re-elected President's order freezing actions by the Civil Rights Division of the Justice Department.

For now and for one thing, the Justice Department is not going to be filing suits on behalf of rather thoroughly vetted and investigated Fair Housing Act complainants.

I am only reporting the facts. I do not want to debate politics. The President was properly elected. The people have spoken, regardless of how people want to slice it. They (or those who supported Mr. Trump) want this. That's their right.

?

Ma'am, first the CTA does not apply to charitable nonprofits. Second, even if the CTA did apply to charitable non-profits, rank-and-file volunteers would not fall into the category of individuals associated with the non-profit who have to report identifying information.

Rook (sic), I oppose the CTA's application to HOAs. But to say HOAs will be seriously hampered and many will not survive is absurd IMO. I mean: Not survive? Come on. They will go into receivership, if HOA members are so upset about providing copies of their driver's license (or using login.gov yada).

What's the latest on this? Google is sending me an article that says we have to submit by March 21st?

Both bills are currently in committee review.
Therefore, the process is starting but slowly.

regarding the legal cases: Per this article, and other articles (do an internet search on CTA court case status), the ban on the CTA was removed on February 17th. The US Dept of Treasury has placed a deadline of March 21, 2025 to file.