AMG CEO's Emails To and From Senator Ted Budd About the Corporate Transparency Act
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Dear Senator Budd,
I am writing to you regarding the Corporate Transparency Act (CTA) and the unintended impact on the 350,000 homeowners associations, condo associations, and housing coops in the U.S.
I am asking as a constituent that you SUPPORT H.R. 5119 – Protect Small Business and Prevent Illicit Financial Activity Act, which passed the House on 12/12/23. Over 80 Senators and Representatives sent a letter to FINCEN urging a 1-year delay of all CTA reporting requirements; I need you to help protect constituents like me from federal regulations which shouldn’t be applied to us.
Community associations (HOAs, condo associations, and housing coops) are usually organized in states as non-profit corporations. They usually do not have a non-profit tax determination by the IRS, but they do file taxes as a non-profit corporation using the 1120-H U.S. Income Tax Return for Homeowners Associations.
The intent of the Anti-Money Laundering and Corporate Transparency Act was to help detect and report suspicious activity including the predicate offenses to money laundering and terrorist finance, to facilitate tracking money that has been sourced through criminal or terrorist activity to safeguard the national security and the financial system of the U.S.
It seems clear this Act was not intended to apply to volunteer-driven nonprofit corporations that are locally based with the sole purpose of providing municipal-like services to residents.
As your constituent, I am very concerned about the following:
A volunteer board of directors’ compliance with the Beneficial Ownership Information (BOI).
Filing personal information that will be accessible to many institutions and organizations of volunteers.
The extreme civil and criminal penalties for non-compliance.
Community associations will have to hire professionals to ensure CTA compliance, which will lead to higher living costs. Volunteers will decline service on their boards of directors due to the exposure to liability. Please help your constituents by supporting H.R. 5119 in the Senate.
Sincerely,
Paul K. Mengert, CEO ASSOCIATION MANAGEMENT GROUP
Dear Mr. Mengert,
Thank you for contacting me about new reporting requirements under the Corporate Transparency Act. It is an honor to represent the people of North Carolina and I appreciate the opportunity to hear from you on this issue.
As you know, the Corporate Transparency Act (CTA) requires corporations, limited liability companies, and other entities registered to do business in the United States to regularly report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). While this provision was intended to target shell companies engaged in illicit financial transactions, the law requires most companies with 20 or fewer employees and less than $5 million in revenue to make this disclosure. This dramatically increases the compliance burden on nearly every small business in America, and places steep penalties on any business that fails to report.
Over the past several months I have heard from many North Carolina small businesses who were unaware of this change in the law, and a study from the National Federation of Independent Business found that 90% of respondents were entirely unfamiliar with these new requirements.
Given this lack of awareness, on December 18, 2023 I joined a bipartisan, bicameral letter to the Department of Treasury and FinCEN requesting that implementation of this provision be delayed beyond the initial January 1, 2024 start date. Legitimate small businesses should not be caught in the crossfire between regulators and illicit actors, and both Treasury and FinCEN must work harder to educate small businesses before implementing this new regulation.
If you are interested in learning more about what is going on in Congress and my work in Washington D.C. for North Carolinians, you may visit my website at budd.senate.gov. If you need assistance with issues related to Social Security, Medicare, veteran benefits, visas, or other items involving a federal agency, you may call my office at 202-224-3154.
Sincerely,
Ted Budd
United States Senator
