CTA NATIONAL UPDATE: Beneficial Ownership Reporting Requirements Reinstated by Federal Court

This article was originally published on February 18, 2024 by Community Association Institute for Community Association Institute Advocacy Blog.

Updated February 18, 2025, 6 PM EST

On February 17, the United States District Court for the Eastern District of Texas granted the government’s motion for stay a nationwide injunction(Opens in a new window) halting enforcement of the Corporate Transparency Act in Smith v. United States Department of Treasury. The Court cited the Supreme Court of the United States’ decision to stay the preliminary nationwide injunction in the Texas Top Cop Shop, Inc., matter as precedent for their decision. 

This was the last remaining nationwide order pausing beneficial ownership reporting requirements. Due to this new court order, reporting requirements under the act are reinstated for applicable community associations. 

FinCEN has previously stated they will likely issue a 30-day extension for all entities impacted by the nationwide injunction. We await an announcement from FinCEN on an official extension. 

CAI continues to track movements in the federal courts over challenges regarding the Corporate Transparency Act and has contacted the United States Department of Treasury, urging an administrative delay be issued due to the chaos and confusion created by these recent court rulings and Congress’ deciding not to take legislative action to extend the filing deadline. 

CAI’S FEDERAL LAWSUIT STATUS

On October 24, 2024, CAI’s preliminary injunction request was DENIED by the federal judge in this case. While this decision was not the outcome CAI had hoped for, it does not mark the end of CAI’s efforts. CAI appealed the court’s denial of the preliminary injunction request on November 4, 2024, and on November 12, 2024, filed its opening brief of the appeal in the Fourth Circuit urging a pause on reporting requirements for community associations while this lawsuit is adjudicated. The Government filed it response to CAI's appeal on February 7, 2025. CAI has until February 28, 2025 to reply.

CAI’s other lobbying and advocacy efforts continue on Capitol Hill seeking both a one-year delay of implementation of the CTA’s reporting requirements and an exemption for community associations. The lawsuit itself is continuing to go through the legal process even as the preliminary injunction decision is being appealed.