CTA FILINGS REMAIN FROZEN: FINCEN CONFIRMS FILING IS STILL NOT REQUIRED

Despite the Supreme Court decision to strike down the nationwide injunction on CTA filings imposed by the Fifth Circuit Court of Appeals, that decision is not the ‘end of the line’ for entities opposed to government mandated filings, as there is still currently a separate nationwide stay that remains in place. Accordingly, for all condominium associations, there is no current requirement to file.

As reported widely by several major news organizations the nationwide injunction against the reporting deadline is still in force, stemming from the Court’s decision in Smith v. Treasury, which is a second (but lesser known) case out of the Eastern District of Texas. As of this morning there has not been an appeal by the government filed in that case challenging the nationwide stay. We will continue to monitor this matter for you and to bring you any updates and our advice.

Yesterday’s order by SCOTUS did not address the nationwide stay issued in the Smith case (E.D. Tex, Tyler Division) on January 7th. The Government will need to seek relief there, presumably, before seeking to enforce the CTA's reporting obligations.

MEEB has been closely tracking and reporting on this issue and has continued to advocate on behalf of condominium associations that the CTA’s reporting requirements are burdensome, constitute government overreach, and should not apply to condominiums

We still maintain that associations should not have to spend additional funds simply to file under the CTA.

FinCEN issued a statement today acknowledging that there is no current requirement to file, despite the Supreme Court’s decision in the Top Cop case. That statement states, in relevant part:

… As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop…

The CTA reporting requirements remain challenged on multiple fronts from pending court cases to pending legislation.

For our firm and our clients, we know it has been difficult to follow all of the changes and at times there has been a lot of noise and fear mongering about the stated penalties for non-compliance. For over thirty years our firm has tried to view every issue from a practical (association friendly) approach as well as from a legal perspective. We will continue to do that and will continue to update you with the best information we have so that your association can review the facts and decide how to proceed on this issue, and every other issue that it may face.

The CTA filing requirements are stayed currently, but that could change favorably or unfavorably for associations – depending on the government’s legal maneuvering, and how Congress and the new administration, decide to act. Stay tuned for further updates.

If you have any questions regarding the CTA please contact your MEEB attorney or law@meeb.com.