On March 21, 2025, an important new development occurred with Financial Crimes Enforcement Network (FinCEN) where an interim final rule was issued removing U.S. domestic reporting companies and their beneficial owners from the requirements to report beneficial ownership information (BOIR) under the Corporate Transparency Act.
The definition of the reporting company was changed to foreign reporting companies which are entities formed under foreign countries’ laws and which are registered to do business in the US. What this means is that Condominium and Community Associations (as well as other businesses falling under the domestic reporting company definition of FinCEN) are no longer required to file or update BOIRs at this time. If you have already filed your BOIR, there is no longer any requirement to make further updates following elections or resignations of beneficial owners at this time. Later this year FinCEN intends to finalize this interim rule. Multiple cases are still pending in various courts around the Country, so this is a fluid and evolving situation.
For a history of the prior developments, rules and court orders, prior to the new March 21st development, on March 2, 2025, the United States Department of Treasury suspended enforcement by that Department of penalties and fines for failure to file the Beneficial Ownership Information Reports (BOIR) with the Financial Crimes Enforcement Network (FinCEN) of the Federal government. Other specific rulings include a January 23, 2025 ruling by the Supreme Court of the United States (SCOTUS) staying the injunction issued in the Texas Top Cop Shop case, meaning that the nationwide injunction in that case was no longer in effect. Prior to that decision on January 7, 2025, the Judge in the Texas Federal District Court Case, Smith v. Department of the Treasury, had issued a separate nationwide injunction which remained in effect until February 18, 2025 when that District Judge lifted its temporary injunction making the filing of the BOIR mandatory again. The Financial Crimes Enforcement Network (FinCEN) issued a formal statement setting a new deadline of March 21, 2025, and on February 27, 2025 FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies due to their failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed.
The purpose of the Federal Corporate Transparency Act which passed in 2021 was to help curb illicit finance and require many companies doing business in the United States to report information about the individuals who ultimately own or control them, which includes the directors of condominium and community associations, by requiring said corporate entities, including condominium and community associations, to file their Beneficial Ownership Information Report (BOIR) with the Financial Crimes Enforcement Network (FinCEN) of the Federal Government which was January 13, 2025 (as stated above, this due date has moved to March 21, 2025). The BOIR requires the Federal tax identification number, and the Board of Directors’ names, residential addresses, birthdates and a copy of valid IDs such as drivers licenses or passports. You may access the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN)’s website at www.fincen.gov/boi to obtain more information and to submit your Beneficial Ownership Information Report. Prior to the new announcements by the Department of Treasury and FinCEN that they will not enforce any penalties at this time, the failure to timely file the BOI Report resulted in a $591 per day fine (up to $10,000), among other penalties.
