UPDATE -CAI Injunction Denied

Corporate Transparency Act

Injunction Sought for Condos and HOAs

Injunction Sought Against Application of Corporate Transparency Act to Condominiums and HOAs COWIE LAW GROUP Maryland and Washington DC Condo and HOA Lawyers and Attorneys

This is an update to the post (below) regarding an injunction sought by the Community Associations Institute (“CAI”) to temporarily prevent the application of the Corporate Transparency Act (“CTA”) to condominiums and HOAs.

On Oct. 24, 2024, the Court denied CAI’s motion for preliminary injunction to postpone the deadline for community associations to comply with the CTA. CAI wanted the Court to temporarily prevent the Department of Treasury from enforcing the CTA against community associations, such as condominiums and HOAs, until such time as CAI had an opportunity to present its legal case that community associations should be exempt. As a result of the Court’s injunction denial, community associations are still required to comply with the January 1, 2025 deadline.

CAI seeks injunction against application of Corporate Transparency Act to Condos and HOAs: On September 10, 2024, the Community Associations Institute (“CAI”) filed a lawsuit against the Department of the Treasury challenging the applicability of the Corporate Transparency Act (“CTA”) beneficial owner filing requirements to community associations. The CAI is seeking, among other things, a temporary injunction to prevent the Treasury Department from applying the CTA to associations pending the resolution of its lawsuit. The most-compelling CAI argument is that community associations are nonprofit organizations under Section 528 of the IRS Code and should therefore be exempt from the CTA’s reporting requirements. The deadline for compliance with the CTA is January 1, 2025. There are steep penalties for non-compliance with the CTA, which include fines of $500 per day (up to $10,000) and possible criminal charges.

Click Here for link for CAI Article with general overview of lawsuit. Contact us for additional information regarding the corporate transparency act and it’s application to condos and HOAs.

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