The Corporate Transparency Act and HOAs

Section 1: Overview, where the reporting obligation stands

As of the July 28, 2026 verification date, an incorporated community association has no obligation to file a beneficial ownership information (BOI) report with the Financial Crimes Enforcement Network (FinCEN), because the current text of 31 C.F.R. § 1010.380 reaches only foreign-formed entities and expressly exempts entities created by a filing with a U.S. secretary of state.¹ The reporting regime originates in the Corporate Transparency Act (CTA), codified at 31 U.S.C. § 5336 and enacted as Section 6403 of the National Defense Authorization Act for Fiscal Year 2021, Pub. L. 116-283.^2,3 FinCEN implemented the statute through the reporting rule at 31 C.F.R. § 1010.380.¹ Under the rule as originally adopted, an incorporated association fell within the definition of a reporting company because a state filing of articles of incorporation creates it, the same act that creates any corporation or limited liability company.⁴ The exemption that many advisers assumed would apply did not: the carve-out for tax-exempt entities reaches organizations described in Internal Revenue Code § 501(c), and an association that elects to be taxed under IRC § 528 by filing Form 1120-H is not a § 501(c) organization, so that exemption never reached it.¹ The answer to the central question has changed more than once through litigation and rulemaking, so anyone relying on advice on this subject that predates the verification date above should recheck it against the current rule text first. The sections that follow set out the framework, the operational map, and the recent activity in detail.

Section 2: The statutory and regulatory framework

2A. The rule as it reads today

A check of the reporting rule at 31 C.F.R. § 1010.380 against ecfr.gov on July 28, 2026 shows that the eCFR states Title 31 content is current as of July 24, 2026 and that the title was last amended July 6, 2026.¹ Under the definition currently in force, a reporting company means only an entity that is a corporation, limited liability company, or other entity, formed under the law of a foreign country, and registered to do business in a U.S. state or tribal jurisdiction by filing a document with a secretary of state or similar office.¹ The paragraph that formerly defined domestic reporting companies is reserved, and a separate exemption for any domestic entity, defined as any corporation, LLC, or other entity created by filing a document with a U.S. secretary of state or similar office, removes such entities from coverage.¹ An incorporated community association is a domestic entity by that definition, so it is not a reporting company and carries no obligation to file, update, or correct a BOI report under the rule as it currently reads. An interim final rule produced that result, "Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension," published at 90 Fed. Reg. 13697 on March 26, 2025 and effective on publication.⁵ The practical effect, as one national law firm summarized it, was "to reduce the application of the CTA from tens of millions of domestic and foreign businesses to only a few thousand foreign businesses."⁶ It is an interim final rule, not a final rule. FinCEN took public comment and stated an intention to issue a final rule, and as of the verification date no final rule revising the reporting company definition has published in the Federal Register or entered § 1010.380; the interim final rule remains the operative and most recent amendment, appearing as the last entry in the section's amendment history.^1,5 Whatever the present posture, FinCEN retains its statutory authority under 31 U.S.C. § 5336, a further rulemaking could change the definition again, and any association that filed a report during an earlier period when filing was expected has reason to retain its filing confirmation and the underlying data.

2B. The statute and why associations were within the original rule

The CTA is codified at 31 U.S.C. § 5336 and was enacted as Section 6403 of Pub. L. 116-283.^2,3 Its stated purpose is to counter money laundering, terrorist financing, and other illicit finance by requiring entities to disclose the individuals who own or control them.⁴ As adopted at 87 Fed. Reg. 59498 on September 30, 2022, effective January 1, 2024, the reporting rule defined a domestic reporting company to include any entity created by filing a document with a secretary of state or similar office.⁴ Incorporated associations come into being by exactly that act, so the rule captured them. The exemption list at 31 C.F.R. § 1010.380(c)(2) contains numerous categories, and the one relevant here is the tax-exempt entity exemption, which reaches an organization described in IRC § 501(c) and exempt under § 501(a).¹ An association that elects § 528 treatment and files Form 1120-H is not described in § 501(c); § 528 is a separate tax regime for homeowners associations and does not confer § 501(c) status. The § 501(c) exemption therefore does not reach a Form 1120-H filer, a point the federal taxation page examines further. The large operating company exemption requires more than 20 full-time U.S. employees, a physical U.S. office, and more than $5,000,000 in gross receipts on a federal return, and the inactive entity exemption requires, among other conditions, that the entity existed on or before January 1, 2020 and holds no assets; few associations satisfy either.¹ For an association that was a reporting company, the operative test for who counts as a beneficial owner was substantial control, which reaches any individual who serves as a senior officer, has authority over the appointment or removal of a senior officer or a majority of the board, or directs or has substantial influence over important decisions; the rule defines senior officer to include a president, chief financial officer, general counsel, chief executive officer, or chief operating officer.¹ The 25 percent ownership prong rarely applies, because members of a nonstock association hold no ownership interest of that kind. A report required the entity's legal name, any trade name, its principal U.S. address, its jurisdiction, and its taxpayer identification number, and for each beneficial owner the full legal name, date of birth, residential street address, a unique identifying number from an acceptable document such as a passport or state driver's license, and an image of that document.¹

2C. Litigation, rulemaking, and penalties

The path to the current rule ran through four milestones, presented here as history rather than current status. First, in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala. Mar. 1, 2024), the district court held the CTA unconstitutional and entered relief limited to the plaintiffs, and the government appealed.⁷ Second, in Community Associations Institute v. U.S. Department of the Treasury, No. 1:24-cv-01597 (E.D. Va. Oct. 24, 2024), the district court denied the association industry's motion for a preliminary injunction, and the plaintiffs appealed to the Fourth Circuit.⁸ Third, in Texas Top Cop Shop, Inc. v. Garland (E.D. Tex. Dec. 3, 2024), the district court entered a nationwide preliminary injunction, and on January 23, 2025 the Supreme Court stayed that injunction in McHenry v. Texas Top Cop Shop, Inc., No. 24A653.⁹ Fourth, FinCEN's March 26, 2025 interim final rule redefined reporting company to cover only foreign entities, removing the domestic filing obligation, including for associations.⁵ The pattern is a sequence in which one court limited relief to the plaintiffs, a second denied it, a third granted it nationwide before the Supreme Court stayed that order, and rulemaking then changed the rule itself. As enacted, 31 U.S.C. § 5336(h) provides civil penalties calculated per day and criminal exposure for willful violations. The base civil figure is $500 per day, adjusted for inflation; the FinCEN penalty table at 31 C.F.R. § 1010.821 sets the current maximum at $606 per day for a beneficial ownership reporting violation assessed on or after January 17, 2025, and the statute provides a criminal fine of not more than $10,000, imprisonment for not more than two years, or both.^2,10 These are statutory maximums, not expected outcomes. FinCEN has revised its guidance and FAQs repeatedly, so only the current versions on fincen.gov should carry any weight.

Section 3: What associations must do under the current rule

A. Determining status

An association establishes whether it is a reporting company by reading its formation history against the rule in force on the day it checks. Under the current text, an entity created by filing with a U.S. secretary of state is a domestic entity and is not a reporting company, so an incorporated association sits outside the definition.¹ An unincorporated association sits differently, because no state filing created it and so it did not meet the original domestic reporting company definition in the first place.⁴

B. If a report is required

The rule as it currently reads requires no BOI filing of a domestic incorporated association, so what follows applies only if a future rule restores a domestic obligation. Where a report is required, the substantial control prong identifies beneficial owners, reaching senior officers and those with authority over the board.¹ The report requires the entity information and, for each individual, name, date of birth, residential address, an identifying number, and a document image; an individual or entity may instead supply a FinCEN identifier.¹ FinCEN's BOI E-Filing System takes the reports.⁵ Under the current rule text, an entity that becomes a reporting company files an initial report within 30 calendar days, an updated report within 30 calendar days of a change, and a corrected report within 30 calendar days of learning of an inaccuracy.¹

C. Governance and records

If a filing obligation were in force, board turnover would trigger an updated report within 30 days, because it alters who exercises substantial control.¹ Whether beneficial ownership records an association keeps are open to member inspection is a state-law question that the Records Inspection column addresses, not the federal rule. Director and officer information is a governance record that connects to the Director Qualifications and Board Elections columns in the state matrix.

D. If no report is currently required

Because the rule currently requires no report of a domestic incorporated association, an association that filed earlier should retain its filing confirmation and the data it used to prepare the report.⁵ Boards and managers should monitor fincen.gov and the Federal Register for any reinstatement of a domestic obligation, watch congress.gov for exemption or repeal legislation, and verify whether any state has enacted its own beneficial ownership reporting regime that could reach associations independently of the federal rule.⁵

Section 4: Recent rulemaking, litigation, and legislative activity

A. Rulemaking

B. Litigation

C. Legislation and active debates

In the 119th Congress, H.R. 425, the Repealing Big Brother Overreach Act, would repeal the CTA in full; the House Financial Services Committee ordered it reported on April 21, 2026 by a 26 to 25 vote, then reported it as amended on June 18, 2026 (H. Rept. 119-701), and the House placed it on the Union Calendar.¹¹ Its Senate companion, S. 100, would also repeal the CTA.¹² The Community Associations Institute has pressed for a community association exemption and a filing delay, and it has supported these repeal measures through its advocacy.⁸

Section 5: Interaction with state law and related coverage

The CTA sits on top of the state entity filings associations already make. An incorporated association files articles of incorporation, designates a registered agent, and in most states files a periodic or annual report, and several of those filings already list officers or directors in public state records, which is one reason the federal duplication drew objection.⁴ As of the verification date, no state had enacted a beneficial ownership reporting regime that reaches incorporated community associations independently of the federal rule. New York's LLC Transparency Act, the only state analogue in force, applies only to limited liability companies, and following Governor Kathy Hochul's December 19, 2025 veto (Veto Message No. 164) of an amendment that would have broadened it, the law reaches only LLCs formed under the law of a foreign country and authorized to do business in New York, so it does not reach a domestically incorporated association.¹³ For entity and records questions, readers should consult the state Governing Statute and Records Inspection columns, and for the § 528 point that defeats the § 501(c) exemption, the federal taxation page.

HOA Weekly updates its Corporate Transparency Act coverage on event rather than on a fixed schedule, because the reporting obligation has changed through both litigation and rulemaking. This page reflects the rule as verified on July 28, 2026; readers should confirm the current status on fincen.gov and ecfr.gov before acting.

Footnotes

1. 31 C.F.R. § 1010.380, Reports of beneficial ownership information (current text on eCFR, Title 31 current as of July 24, 2026) (ecfr.gov) ↩
2. 31 U.S.C. § 5336, Beneficial ownership information reporting requirements (including § 5336(h) penalties) (Office of the Law Revision Counsel, uscode.house.gov) ↩
3. National Defense Authorization Act for Fiscal Year 2021, Pub. L. 116-283, § 6403, 134 Stat. 3388 (govinfo.gov) ↩
4. FinCEN, Beneficial Ownership Information Reporting Requirements, final rule, 87 Fed. Reg. 59498 (Sept. 30, 2022), effective Jan. 1, 2024 (federalregister.gov) ↩
5. FinCEN, Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension, interim final rule, 90 Fed. Reg. 13697 (Mar. 26, 2025) (federalregister.gov); see also FinCEN, Beneficial Ownership Information Reporting, fincen.gov/boi ↩
6. U.S. Department of the Treasury, press release describing the narrowed scope of the FinCEN interim final rule (foreign reporting companies only) (treasury.gov) ↩
7. National Small Business United v. U.S. Department of the Treasury, No. 24-10736 (11th Cir. Dec. 16, 2025) (reversing N.D. Ala. and holding the CTA constitutional) (ca11.uscourts.gov) ↩
8. Community Associations Institute v. U.S. Department of the Treasury, No. 1:24-cv-01597 (E.D. Va. Oct. 24, 2024) (order denying preliminary injunction, ECF 40) (docket via Justia); see also Community Associations Institute advocacy summary (appeal to the Fourth Circuit, No. 24-2118), caionline.org ↩
9. McHenry v. Texas Top Cop Shop, Inc., No. 24A653 (U.S. Jan. 23, 2025) (order granting stay of the Eastern District of Texas nationwide preliminary injunction entered Dec. 3, 2024) (supremecourt.gov) ↩
10. 31 C.F.R. § 1010.821, Penalty adjustment and table (Table 1, 31 U.S.C. 5336(h)(3)(A)(i), maximum $606 for assessments on or after Jan. 17, 2025) (ecfr.gov) ↩
11. H.R. 425, Repealing Big Brother Overreach Act, 119th Cong. (ordered reported Apr. 21, 2026, 26-25; reported as amended June 18, 2026, H. Rept. 119-701) (congress.gov) ↩
12. S. 100, Repealing Big Brother Overreach Act, 119th Cong. (repeals the Corporate Transparency Act) (congress.gov) ↩
13. New York LLC Transparency Act, effective Jan. 1, 2026, as narrowed following Governor Hochul's Dec. 19, 2025 veto (Veto Message No. 164) of S.8432; see 31 C.F.R. § 1010.380(c)(2)(xxiv) (domestic entity exemption) (ecfr.gov), and FinCEN, Beneficial Ownership Information Reporting, fincen.gov/boi (federal foreign-only scope) ↩