By Richard S. Ekimoto, Esq.

Yesterday, the U. S. Treasury Department issues a press release stating that it will not enforce the BOI Reporting Requirements against U.S. citizens and domestic reporting companies. The press release states, “not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either.” The information has not yet been updated on the Fincen website.

If the U. S. Treasury Department follows through, community associations in the United States would not be subject to penalties or enforcement actions for failing to file BOI Reports. Technically, the CTA still applies to domestic reporting companies and U.S. Citizens to file BOI Reports unless they qualify for one of the twenty-three (23) exemptions. However, the announcement would mean that there would be no penalties for violations or any enforcement of the law for U. S. citizens or domestic entities. Hopefully, FinCen will also consider revisions to its regulations to expand the number of entities exempt from the BOI Reporting Requirements.

Community associations that have not yet filed their BOI Report should refrain from doing so at this time.

By Richard S. Ekimoto, Esq.

Today, FinCen posted a news release that it will not issue any fines or other penalties for any entity that does not file a BOI Report until new interim rules are adopted. Before March 21, 2025, FinCen intends to issue interim rules that will extend the deadline for filing BOI Reports. In addition, FinCen intends to solicit public comment on potential revisions to existing BOI Reporting requirements. Those comments will be considered by FinCen in adopting changes to the BOI Reporting requirements, including further modifications to the deadlines.

Any community associations that have not filed their BOI Report should wait until after FinCen established a new deadline and potentially new requirements for which entities qualify as reporting companies.

By Richard S. Ekimoto, Esq.

The Federal District Court lifted the injunction preventing enforcement of the CTA in the Smith v. U. S. Department of the Treasury case. The injunction was lifted by the Federal District Court in light of the U.S. Supreme Court’s ruling in the McHenry v. Texas Top Cop Shop, Inc. case. However, FinCen issued a notice that it would extend the deadline to file the BOI Reporting deadline by 30-days from today, February 19, 2025. FinCen says that the new deadline is March 21, 2025. One of the stated purposes of the extension is to allow the U.S. Treasury Department to “assess its options to further modify deadlines while prioritizing reporting for those entities that pose the most significant national security risks.”

In addition, Congress is considering a bill to delay the DOI Reporting deadline until January 1, 2026. The U.S. House of Representatives has passed the bill and is pending in the U.S. Senate.

Community associations that have not yet filed their BOI Report may wish to wait until FinCen completes its assessment whether further extensions are necessary and whether changes to the reporting requirements will be made to focus on entities that pose the greatest risk to national security.

By Richard S. Ekimoto, Esq.

Yesterday, the U.S. House of Representatives passed the Protect Small Business from Excessive Paperwork Act of 2025 (H.R. 736) which extends the deadline for filing a BOI Report to January 1, 2026. The bill now will be sent to the U.S. Senate for consideration. If passed by the U.S. Senate without amendment, the bill would be sent to the President for signature or veto.

As noted in our recent post, the BOI Reporting requirement is still on hold and FinCen has proposed a 30 day review of the CTA to determine whether possible changes to the law are necessary to remove low-risk reporting companies from the BOI Reporting requirement.

Community associations that have not filed their BOI Report should hold off on filing for now until FinCen conducts it review of the law. In addition, there is a possibility that Congress will amended the CTA to change the deadline.

By Richard S. Ekimoto, Esq.

Although the U.S. Supreme Court issued an emergency stay of the CTA injunction in the Texas Top Cop, Inc. v. McHenry case (formerly Texas Top Cop, Inc. v. Garland), FinCen is currently enjoined from enforcing the CTA because of a second injunction in the Smith v. U.S. Department of the Treasury case. FinCen has now appealed the second injunction. However, FinCen’s motion included the following:

If this Court grants the stay, FinCEN intends to announce that it will extend the compliance deadline for thirty days. During that period, FinCEN will assess whether it is appropriate to modify the CTA’s reporting requirements to alleviate the burden on low-risk entities while prioritizing enforcement to address the most significant risks to U.S. national security.

Since the U.S. Supreme Court has already ruled on the substance of the motion, it is likely that the stay will issue. However, FinCen indicated that it will allow reporting companies at least thirty days to file their BOI Reports. More importantly, FinCen has indicated that it is considering changing its approach to BOI Reports and will be evaluating whether “low-risk entities” need to file BOI Reports.

Of interest to community associations is that the Community Associations Institute met with FinCen last year asking that community associations be exempt from Reporting Companies because they are low-risk entities. FinCen, at the time, rejected that approach. It appears that FinCen is now reconsidering whether low-risk entities are required to file BOI Reports.

Community associations that have not filed their BOI Report might hold off on filing until FinCen makes its determination about low-risk entities.