The enactment of the Corporate Transparency Act (“CTA”) by Congress on January 1, 2021, created a reporting duty for many foreign and domestic businesses. The CTA, which is meant to help prevent and combat financial crimes, including money laundering and tax fraud, requires reporting companies to file a Beneficial Ownership Information (“BOI”) report by certain dates, depending on the date of incorporation of the covered entities. Community associations largely fall within the definition of a reporting company and thus are also obligated to timely file a BOI report. For most associations that were already operating prior to January 1, 2024, the deadline for filing a report is December 31st, 2024. For any entity formed on or after January 1, 2024, a report is required within 90 days of formation.
However, on October 29, 2024, the Financial Crimes Enforcement Network (“FinCEN”) announced that it would be providing reporting relief to victims of Hurricane Milton by extending the filing deadline by six (6) additional months. This extension includes the initial report, as well as updates and corrections to prior reports.
In order to qualify for the relief, the reporting association must have (1) an original reporting deadline falling between October 4, 2024, and January 2, 2025 (which would therefore include any association in existence prior to January 1, 2024, unless the association is exempt), and (2) a principal place of business in an area designated by the Federal Emergency Management Agency (“FEMA”) qualifying for individual or public assistance and the Internal Revenue Service (“IRS”) as eligible for tax filing relief due to Hurricane Milton.
The counties designated for assistance are reflected in the map below, and can be found here:
Based on this announcement and information provided by FinCEN, this extension does not require proof from a reporting company of the need for the extension. It also does not appear that an extension must be requested – rather, that the reporting company simply file by the new deadline if it meets the extension requirements.
Additionally, FinCEN has indicated that it will “work with any reporting company whose principal place of business is outside the disaster areas but that must consult records located in the affected areas to meet the deadline.” Such an entity seeking assistance should contact FinCEN at https://www.fincen.gov/boi.
There have been recent legal challenges to the CTA and its applicability to community associations, as well as proposed legislation to exempt community associations and other entities. However, as of the publishing of this post, there does not exist any judicial order or enacted legislation which would exempt community associations that meet the definition of a reporting company under the CTA, and thus associations are strongly recommended to speak with legal counsel on their filing requirements, subject to the filing extension mentioned above. Ultimately, the failure to comply with the reporting requirements in the CTA may result in penalties for associations and its directors and officers.
McCabe | Ronsman is experienced in representing associations and can provide guidance with this and other related issues. Please contact our office at (904) 396-0090 to set up a consultation if you are seeking new engagement with our Firm. If you are an existing client, please contact your primary association attorney or partners Mike McCabe (mccabe@flcalegal.com) or Ed Ronsman (eronsman@flcalegal.com) with any questions.