What happened to the Corporate Transparency Act (CTA)?
On December 3, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., a recent decision by the United States District Court EASTERN DISTRICT OF TEXAS SHERMAN DIVISION, granted a nationwide preliminary injunction, which has blocked the U.S. Department of Treasury from enforcing the Corporate Transparency Act’s beneficial ownership information (BOI) reporting requirements, and reporting deadlines until further Court Order.
On December 5, 2024, The Justice Department, on behalf of FinCEN, filed a Notice of Appeal to the United States District Court’s decision. The United States government still believes the Corporate Transparency Act is constitutional and will continue to argue its validity.
On December 7, 2024, FinCEN confirmed that Reporting Companies would not longer be required to file their BOI reports for CTA compliance and not subject to liability for failing to file their BOI reports, as long as the injunction by the US District Court of Eastern Texas stays in effect. FinCEN is still accepting BOI reports at this time on a voluntary basis.
If on Appeal, the preliminary nationwide injunction is overturned, there may be a possibility that the CTA’s BOI reporting requirements could be reinstated and due as of December 31, 2024, and may reimpose the severe penalties for non-compliance.
Unincorporated Homeowners Associations and Condominium Association of Unit Owners in Hawaii
This recent decision by the US District Court of Eastern Texas has not answered the question, of whether an unincorporated Homeowners Association, such as a Maui Condominium Association of Unit Owners, qualifies as a Reporting Company under the CTA, which is still to be determined by FinCEN and the Courts.
Why hire an Attorney to deal with the Corporate Transparency Act?
An Attorney would be able to assist you with the process of gathering all the correct information, which can take time, and if needed, advising your Reporting Company on how to file out its BOI report correctly and in a timely fashion. Since it is unknown how the Appellate Court will decide, it is important for all Reporting Companies to keep up to date with the Appellate Court’s pending decision, and have all of their Beneficial Owner’s Information ready, incase the preliminary nationwide injunction overturned, and the CTA’s reporting requirements become due again by December 31, 2024.
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