Corporate Transparency Act Déjà Vu – CTA Reinstated, Promptly Put Back on Hold (For Now): What Do Illinois Community Associations Need to Know?

After a flurry of activity in the last 24 hours, the “on-again, off-again” Corporate Transparency Act (“CTA”) is back on hold, at least for now. On January 23^rd, the U.S. Supreme Court ruled that the government may proceed with the enforcement of the CTA. The very next day, the Financial Crimes Enforcement Network of the U.S. Treasury Department (“FinCEN”) issued updated guidance again pressing pause on the CTA’s reporting requirements.  As such, the CTA’s mandatory reporting requirements are back on hold—at least temporarily.

Per FinCEN’s January 24^th updated guidance (available here), reporting companies (i) “are not currently required to file beneficial ownership information with FinCEN” despite the Supreme Court’s recent ruling reinstating enforcement of the CTA (ruling available here); and (ii) “also are not subject to liability if they fail to file this information” during the current pause. 

The CTA broadly imposes mandatory reporting requirements and applies to most condominium and community associations, as well as residential cooperatives. The recent Supreme Court ruling, and subsequent (temporary) hold on the CTA’s mandatory reporting requirements from FinCEN, came after a Texas judge previously blocked the federal government from enforcing the CTA due to potential constitutional issues just before the New Year. The Supreme Court ruling could also be interpreted as an indication that the CTA and its mandatory reporting requirements will ultimately be upheld, but for now the CTA remains in a holding pattern.   

Further updates regarding the fate of the CTA are expected in the coming weeks and months, and it is possible that the CTA may snap back into effect at any time with FinCEN once again setting an unexpectedly short deadline for compliance. To avoid any “surprise” emergency timing issues, if an association is willing to do so, it is prudent and recommended to voluntarily proceed with CTA reporting. For community associations that have already completed their initial CTA filing, no further action is needed in response to this.  

LP is committed to keeping our community association clients informed of, and prepared to proactively and successfully navigate, any changes in the law. For questions regarding the CTA, including reporting requirements, or other issues facing your condominium or community association or co-op, please contact Howard Dakoff, Laura Marinelli, Adam Kahn, or Molly Mackey of LP’s Community Association Group.