And Freeze! The Corporate Transparency Act Rules Paused for a Do-Over

The whiplash of the Corporate Transparency Act (“CTA”) has taken yet another turn with success for the vast majority of legal entities, including community associations, in not having to comply with the CTA.

On February 18, 2025, the last injunction that had the effect of pausing implementation and enforcement of the CTA was lifted.  This resulted in FinCEN setting a new reporting deadline of March 21, 2025, for compliance. On March 2nd, the Dept. of Treasury, the agency the encompasses FinCEN issued a formal notice that:

• It will not enforce any penalties of fines associated with the beneficial ownership information reporting rule (‘Rule”).
• It is scrapping the current Rule entirely.
• It will propose a new rule to narrow its applicability to only foreign companies, which does not include community associations. This new rule is expected in the next few months.

As community associations were unintentionally caught in the cross-hairs of well-intentioned efforts to combat money-laundering and tax evasion, this is wonderful and welcomed news for community associations that were rightly concerned about all aspects of the CTA and how it would deter members of a community from volunteering.

So what began about two years ago with little publicity followed by significant litigation and injunctions, the CTA will be, at least for the next few years, relegated to a tale of years of work to prevent regulations on community associations that should not have been imposed in the first place.