NOTE: Due to the rapidly evolving nature of this situation, the blog post below does not contain the most up to date information. Please see our latest blog post on the Corporate Transparency Act (CTA) here:
https://eclipsecommunities.com/corporate-transparency-act-the-dizzying-back-and-forth-continues-cta-reporting-voluntary-for-now/
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction halting enforcement of the Corporate Transparency Act (CTA), which requires companies to report beneficial ownership information (BOI). Judge Amos L. Mazzant III ruled that the U.S. Department of Treasury cannot enforce the act’s BOI reporting requirements, effectively blocking the January 1, 2025, deadline. This injunction applies across the entire U.S. and affects all organizations, including community associations. It is anticipated that there will be further litigation and potential appeal of the ruling.
The Community Associations Institute (CAI) has voiced its belief that the CTA imposes an unnecessary burden on community associations, which function differently from traditional businesses. CAI is advocating for either a repeal or exemption of the act to ease reporting obligations for volunteer leaders. The injunction follows similar arguments made in CAI’s own lawsuit against the U.S. Treasury Department and other federal agencies, citing overreach of federal authority and violations of constitutional rights.
The Eclipse team continues to monitor the case and urges community associations and their leaders to stay informed about future developments.
