A federal law named the Corporate Transparency Act was recently ruled to be applicable to incorporated community associations. This ruling imposes new reporting obligations on those associations and their directors.
Incorporated community association boards must file a Beneficial Owner Information (BOI) report with the U.S. Treasury by December 31, 2024. The BOI report requires certain information to be disclosed about property owners who have substantial ownership or management interests in the association, including the current members of its board of directors. Each director must first obtain what is called a FinCEN number. A designated director must then complete a BOI Report listing the name of the association, its tax ID number, and the FinCEN numbers of its current directors. Associations are required to update their BOI Report within 30 days the date that they appoint a new director or a director resigns.
Incorporated community associations should consult the FinCEN guidelines, their accountants, and their legal counsel if they have questions about this new reporting requirement.
UPDATE: A federal district court in Texas has issued a nationwide temporary injunction against the enforcement of the Corporate Transparency Act. Associations are not obligated to file BOI reports until that injunction is removed.
