Supreme Court Allows Enforcement of Corporate Transparency Act
On December 3, 2024, a federal court in Texas issued a nationwide preliminary injunction in Texas Top Cop Shop, Inc v Garland, No. 4:24-CV-478, 2024 WL 4953814, at *37 (ED Tex, December 3, 2024), temporarily halting the enforcement of the Corporate Transparency Act. Unfortunately for community associations, the Fifth Circuit delivered a lump of coal just two days before the holiday. On December 23, 2024, the Fifth Circuit stayed the ruling of the district court’s injunction pending appeal. However, on December 27, 2024, the Fifth Circuit reinstated the injunction which halted enforcement once again. On December 31, 2024, the US Department of Justice asked the Supreme Court to review this matter.
On January 23, 2025, the Supreme Court stayed the injunction blocking the enforcement of the Corporate Transparency Act. This means that corporate entities, including most community associations, subject to the Corporate Transparency Act are again required to submit Beneficial Ownership Information (“BOI”) reports with Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”). Under the Corporate Transparency Act, corporate entities subject to the law that existed prior to 2024 had until January 13, 2025 to file their BOI reports. Given that the deadline has passed, it is important that community associations file their BOI reports with FinCEN as soon as possible or face potential penalties of $500/day up to $10,000.
The Fifth Circuit is still scheduled to hear oral arguments regarding the constitutionality of the Corporate Transparency Act on March 25, 2025. However, at this time, community associations are legally obligated to file a BOI report with FinCEN. We recommend that community associations contact Hirzel Law, PLC as soon as possible to take the necessary steps to file a BOI report with FinCEN.
Kevin Hirzel is the Managing Member of Hirzel Law, PLC. He concentrates his practice on commercial litigation, community association law, condominium law, Fair Housing Act compliance, homeowners association law, and real estate law. Mr. Hirzel is a fellow in the College of Community Association Lawyers, a prestigious designation given to less than 175 attorneys in the country. Mr. Hirzel has been recognized as a Michigan Super Lawyer’s Rising Star in Real Estate Law by Super Lawyers Magazine, a Leading Lawyer in Condominium & HOA law by Leading Lawyers Magazine, and as a Best Lawyer in Real Estate Law by U.S News and World Report’s Best Lawyers Publication. Hirzel Law, PLC represents community associations, condominium associations, cooperatives, and homeowners associations, in Michigan and Illinois. He may be reached at (248) 986-2290 or kevin@hirzellaw.com.
