So NOW What is the Status of the Corporate Transparency Act?

By Tom Murray

Ok, hang on! I will cut to the chase, and then provide further details below. As of January 24, 2025, there is no duty for Board members of Indiana homeowners associations and condominium associations to file Beneficial Ownership Interest (BOI) reports with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). That is because of recent federal court rulings concerning the Corporate Transparency Act (CTA). This is true, even though the U.S. Supreme Court issued a ruling on January 23, 2025, stating that the nationwide injunction issued by a Texas federal district court judge in a case called Texas Top Cop Shop is no longer in effect, thus clearing the way for FinCEN to commence enforcement of the BOI filing requirements.

FinCEN’s Latest Statement:

Despite that U.S. Supreme Court ruling, on the morning of January 24, 2025, FinCEN posted this as an “Alert” on its website:

In light of a 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, reporting companies may continue to voluntarily submit beneficial ownership information reports.

****

On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in [the Texas Top Cop Shop case]. As a separate nationwide order issued by a different federal judge in Texas [in the Smith case] still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in [the Texas Top Cop Shop case]. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

FinCEN’s statement is somewhat of a surprise, but it is good news (for now) for Indiana HOA Board members.

What is going on now that the newly elected Congress is in office?

Dawn Bauman, the chief strategy officer of the Community Associations Institute (www.caionline.org), reported yesterday that Congress has introduced legislation to fully repeal the CTA. In the House of Representatives, H.R. 425 would repeal the CTA. Likewise, in the Senate, S. 100 also would repeal the CTA. The bills were introduced in January 2025 by a Representative from Ohio and a Senator from Alabama. If passed, both bills will completely repeal the CTA and its beneficial owner reporting requirements.  

Dawn Bauman said that although these bills have momentum on Capitol Hill, she cautioned that a court ruling can bring the BOI filing requirements back into force at any time.

What should the association board do?

Presently, there is no immediate requirement to file entity and BOI reports with FinCEN. Boards that have not yet filed their initial reports with FinCEN may hold off on filing for the time being. Boards that have already filed their initial reports can hold off on filing updates. Again, this may change quickly as more court decisions are made in the future as Congress starts the process of considering and acting upon the two bills. 

Board members (and your fellow homeowners) can also reach out to your members of Congress and the Senate to ask them to support the two bills. The CAI has provided this link to help you: Action Center. When former House member Greg Pence spoke to members of our local chapter of the CAI last year concerning the CTA, he said that if you contact your elected official, it is much better for you to personalize your request for support of pending legislation. He said that if a member of Congress receives a large number of “boiler plate” statements or emails that are suggested by some advocacy group, they are not nearly effective as those that are truly “personalized”. For example, you could say something like, “I live in the Happy Acres subdivision in Noblesville, Indiana and I serve on my HOA’s Board of Directors. There are 126 homes in Happy Acres. I am asking you to vote in favor of H.R. 425 because…….”

Can we file anyway?

Yes. Even after all of the recent court proceedings, right now, the filing of BOI reports is voluntary. Some of our clients have already done so. Their rationale is that they want to be safe in case the injunction is overturned or modified, which could hypothetically happen at any time. However, one thing we have learned from the past couple of months is that FinCEN would likely create a “grace period” to give what it considers a reasonable deadline for the completion of the BOI filings.

Stay tuned for more information.

We will continue monitoring the CTA and will provide information as the legal landscape surrounding the CTA evolves.

If you would like to discuss these or other issues with our firm, please contact one of our firm’s attorneys directly or email us through the firm’s website at info@IndianaHOALaw.com