On behalf of our members, Community Associations Institute took another step to protect the interests of community associations across the country. Last week, CAI submitted a detailed letter and white paper to the U.S. Department of Treasury’s Financial Crimes Enforcement Network , highlighting concerns regarding the Corporate Transparency Act . The submission outlines how the act, in its current interpretation, disproportionately impacts community associations, many of which are nonprofit organizations operating with volunteer-led boards.
In the white paper, CAI provides a thorough analysis demonstrating why community associations should be considered exempt from the act. These associations, which serve over 75 million Americans, are nonprofit entities under Section 528(a) of the Internal Revenue Code, functioning similarly to 501(c) organizations that are already exempt from the act. The white paper argues enforcing the act’s requirements on community associations would add unnecessary burdens and legal risks without meaningful benefit to national security or anti-money laundering efforts.
The submission also includes the results of a survey conducted from July to September 2024, with more than 950 community association members voicing concerns about the compliance challenges and potential negative impacts of the act. Many respondents expressed concerns about the act’s implications for volunteer participation on community association boards, and the significant privacy risks associated with providing beneficial ownership information.
CAI’s advocacy efforts and legal challenge are aimed at securing a permanent exemption for community associations from the act’s reporting requirements, ensuring community association volunteers are not subject to undue compliance obligations. The white paper and accompanying letter sent to treasury officials are key steps in CAI’s ongoing work to protect the interests of the millions of Americans who live and work in community associations.
It is important to note as CAI continues its efforts, community associations should be prepared to comply with filing requirements by January 1, 2025, until we announce otherwise.
For more details, you can access the white paper at www.caionline.org/cta or The Corporate Transparency Act & Community Associations
