CAI Has Filed Suit, Challenging the Constitutionality and Applicability of the Corporate Transparency Act
By P. Thomas Murray, Jr.
Tom Skiba, the Chief Executive Officer of the Community Associations Institute (the “CAI”), has announced that the CAI has filed suit against the U.S. Department of the Treasury, Secretary Janet Yellen, and the director of the Financial Crimes Enforcement Network (“FinCEN”) concerning the Corporate Transparency Act, the “CTA”. It seeks a declaration that community associations such as homeowners associations, condominium associations, and planned unit developments are exempt from compliance with the CTA’s reporting requirements. It also challenges the constitutionality of the CTA’s application to community associations.
The suit was filed on September 10, 2024, in federal court for the Eastern District of Virginia in part because the CAI is headquartered in Falls Church, Virginia. CAI is an international not-for-profit research and education organization with 63 chapters and 47,000 members. I have been a member of the Central Indiana Chapter of the CAI for more than 35 years. Our firm encourages ALL of our community association clients to be members of the CAI, regardless of whether they use the services of a property management company.
Unfortunately, the filing of this suit in federal court will not automatically negate the requirements of complying with the CTA. We anticipate months (if not years) of litigation before any outcome is reached. Thus, if you serve as an Officer or Board member of a typical Indiana community association such as a homeowners association, condominium association, or planned unit development, you should comply with the December 31, 2024, reporting requirements. That is because, under the CTA’s definitions, you are most likely considered a “Beneficial Owner.” By the December 31st deadline, you must file a “Beneficial Owner Interest” report with FinCEN that includes your full legal name, date of birth, residential street address, and a “unique identifying number from an acceptable identification document” such as an unexpired state-issued driver’s license. Fortunately, the online filing process is relatively easy.
To watch Tom Skiba’s announcement via You Tube, click this link: caionline.org/Advocacy/Priorities/CTA/Pages/landing.aspx?utm_source=Real Magnet&utm_medium=email&utm_content=CTA_Lawsuit&utm_campaign=202290225
References:
• FinCEN Beneficial Ownership Information home page - https://www.fincen.gov/boi
• FinCEN Reference Materials, including Act and Reporting Requirements - https://www.fincen.gov/boi/Reference-materials
• FinCEN FAQs - https://www.fincen.gov/boi-faqs
