On Thursday January 23, 2025, the U.S. Supreme Court allowed the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) to continue enforcing the Corporate Transparency Act (CTA). The CTA is a groundbreaking law requiring millions of U.S. corporations, including community associations, to disclose information about their board members (“beneficial owners”).

The Supreme Court’s decision lifted an injunction that had temporarily blocked enforcement of the CTA. This new ruling permits the government to proceed with enforcement of the CTA while legal challenges continue in the U.S. Court of Appeals for the Fifth Circuit where oral arguments are scheduled for late March.

On Friday January 24, 2025, FinCEN issued the following statement on their website: “On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. 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.”

How Does This Impact Community Association Board Members?

Amidst all the legal whiplash around the Corporate Transparency Act, it’s crucial for community association board members to remain vigilant and adaptable as this legal situation continues to evolve.

Board members that have not yet filed their initial beneficial owner information (BOI) reports, as well as those with changes to report since their initial filing, should continue gathering the necessary information and be prepared to file promptly if required.

If voluntarily complying with the CTA at this time does not impose an undue burden, we recommend that board members voluntarily file their BOI reports as soon as possible to avoid further delays.

Background on the Corporate Transparency Act

In early 2024, the U.S. Federal Trade Commission (FTC) revealed that U.S. citizens lost $10 billion to scams in 2023. Over $750 million of these losses were attributed to “business imposters,” or scams where fraudsters posed as legitimate businesses utilizing fraudulent schemes and false identities. To address this risk, the federal government introduced the Corporate Transparency Act (CTA) enforced by the Financial Crimes Enforcement Network (FinCEN).

The Corporate Transparency Act (CTA) mandates that certain businesses disclose ownership information to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). The primary goals of the CTA are to increase business transparency and accountability in an effort to prevent illegal financial activities such as fraud, money laundering, and tax evasion. Beyond these benefits, proponents argue that beneficial ownership information (BOI) reporting can also help financial institutions and legitimate businesses foster trust with both customers and government entities.

Under the CTA, certain community associations will be required to report detailed information about their board members to the Financial Crimes Enforcement Network (FinCEN). Current board members of these associations are considered “beneficial owners” under the CTA.

Consequently, board members must provide FinCEN with detailed personal information, including their legal name, date of birth, residential address, and a copy of a valid, unexpired government-issued identification.

Penalties for non-compliance, whether intentional or not, could result in severe penalties, including daily fines over $500, penalties up to $10,000, and up to two years in prison.

Legal Resource

KSN will continue to monitor the situation, the status of the Corporate Transparency Act (CTA), and its impact on community associations.

If you are a KSN community association client and your board members (“beneficial owners”) have sent our firm their information and documents, we are working diligently to file the beneficial owner information (BOI) reports.

If your board members would like to complete the beneficial owner information (BOI) reporting, KSN can provide legal assistance. Our law firm has invested significant time and effort into protecting our clients’ private information using high-grade encryption. KSN is prepared to assist board members in navigating the CTA’s requirements by:

• Preparing and filing the correct documentation with the U.S. Department of the Treasury within the required reporting timeframe.

• Providing proper board member personal identification to the U.S. Department of the Treasury in a secure manner.

• Updating the U.S. Department of the Treasury when there are changes to your community association’s board (e.g., following annual elections or when a board member moves, etc.).

Contact our law firm if you have questions regarding the CTA’s impact to your community association and the required board member personal information and documents that must be submitted to the U.S. Department of the Treasury. KSN can assist in preparing the documentation that complies with the CTA including protocols to promptly learn about any changes to the association’s “beneficial owners” and/or updates to their Personally identifiable information (PII) that must be submitted.

You can reach KSN by calling 855-537-0500 or visiting our website at www.ksnlaw.com.

Since 1983, KSN has been a legal resource for condominium, homeowner, and townhome associations. Additionally, we represent clients in real estate transactions, collections, landlord/tenant issues, and property tax appeals. We represent thousands of clients and community associations throughout the US with offices in several states including Florida, Illinois, Indiana, and Wisconsin.

Please note the material contained in this article is for educational and informational purposes only and does not constitute legal advice. No attorney-client relationship is established by your review or receipt of the information contained in this article. You should not act on the information discussed in this article without first obtaining legal advice from an attorney duly licensed to practice law in your State. While KSN has made every effort to include up-to-date information in this article, the law can change quickly. Accordingly, please understand that information discussed in this article may not yet reflect the most recent legal developments. Material is not guaranteed to be correct, complete, or up to date. KSN reserves the right to revise or update the information and statements of law discussed in the article law at any time, without notice, and disclaims any liability for your use of information or statements of law discussed on the article, or the accessibility of the article generally. This article may be considered advertising in some jurisdictions under applicable law/s and/or ethical rules/regulations. © 2025 Kovitz Shifrin Nesbit, A Professional Corporation.