Helpful Tips – Corporate Transparency Act

WVOHOA Seal

TIPS in a nutshell – YUP, just about every planned community will have to fill out that required Federal Form – it’s up to all of us to be in-the-know, to learn and share information –

Questions & Answers about the Federal
Corporate Transparency Act

WVOHOA continues receiving welcomed calls, e-mails and even a few of you have caught us running errands at the bank, post office and yup, even the grocery store too. Conversation is always welcome, though having what you need in hand when you need it is oh-so-much better.

Soooo the following information may prove to be a little more helpful, we sure hope so. Key to this entire Federal requirement is RELAX – you’ll do fine, really you will. Remember, legal information is not legal advice and we are certainly about sharing information, homeowner to homeowner.

FinCEN US Treasury Seal
https://www.fincen.gov/
We’ve compiled TIPS about the Federal Requirements of your HOA Directors, Officers or perhaps your legal counsel, CPA, or maybe even your management company representative in order to comply with the Corporate Transparency Act, in effect January 1, 2024

PREREQUISITE – HOAs, Condos, and other types of planned communities

  • Less than $5 million in assets gross revenue [corrected 3-5-2024]
    (many WV communities meet this requirement)
  • Less than 20 employees
    (many WV communities meet this requirement)

The Acronyms: we know, we know, we hate m’ too
CTA = Corporate Transparency Act
BOI = Beneficial Ownership Information
BOIR = Beneficial Ownership Information Report (the form)
FinCEN = Financial Crimes Enforcement Network

FIRST TIP: Relax – your secured information, is your business

M. 7. Who can request a FinCEN identifier on behalf of an individual?

ANYONE authorized to act on behalf of an individual may request a FinCEN identifier on the individual’s behalf on or after January 1, 2024.

  FinCEN identifiers for individuals are provided upon request after the requesting party has submitted the necessary information.

  Obtaining a FinCEN identifier for an individual requires the requesting party to create a Login.gov account, which is tied to the individual receiving the FinCEN identifier. Individuals who receive a FinCEN identifier should ensure their login credentials, including email address and related multi-factor information associated with their Login.gov account, are saved for future reference.

FinCEN’s Small Entity Compliance Guide includes additional information on the FinCEN identifier in Chapter 4.3

What is a FinCEN Identifier and how can I use it?

OK, so what does all that that mean?
  For example: lets say your Board Treasurer is selected to complete the required Federal form *BUT* each Board member (a beneficial owner) doesn’t want to give their Treasurer their personal information. Soooo, each Board member files a request for a unique number, it’s called a FinCEN Identifier. (there’s that acronym again “Financial Crimes Enforcement Network)  That unique identifier is only you, a Board member.

  You provide your new FinCEN number you’ve received to your Treasurer, now they can complete the required form and they don’t have any of your personal information. Well maybe your address, but they already know that.

SO what does my FinCEN ID look like for me as one Board member?
  It’s a 12-digit number and the first digit is a 3 – that number = one individual.

Next TIP:
using the FILING INSTRUCTIONS to complete the APPLICATION

 Remember, only you can create your own government login to obtain your own FinCEN Identifier.

Q: Forms ? What Forms? Any Instructions?
A: The form your Board Treasurer will need:

Best TIP of all – THE ANSWERS!  

Beneficial Ownership Information Reporting – Frequently Asked Questions

  OOPS – in case you’ve wondered – your community may not have to meet some of the form’s requirements because your community just might be exempt.

OK, so what does exempt mean on the required form?
  When completing the form you selected “EXEMPT” and only the fields on the form activate so you need only the information that is required.

Tax-exempt entity (Exemption #19) see pages 4 & 11 tax exempt entity
An entity qualifies for this exemption if ANY of the following four criteria apply:

  1. The entity [in this case your HOA] is an organization that is described in section 501(c) of the Internal Revenue Code of 1986 (Code) (determined without regard to section 508(a) of the Code) and exempt from tax under section 501(a) of the Code.
  2. The entity [in this case your HOA] is an organization that is described in section 501(c) of the Code, and was exempt from tax under section 501(a) of the Code, but lost its tax-exempt status less than 180 days ago.
  3. The entity is a political organization, as defined in section 527(e)(1) of the Code, that is exempt from tax under section 527(a) of the Code.
  4. The entity is a trust described in paragraph (1) or (2) of section 4947(a) of the Code.

Just remember – you still have to complete a form.

  • The Form must be completed by January 1, 2025

Federal Section 6403 concerning the Beneficial Ownership Information (BOI) reporting requirements currently required by the U.S. Secretary of the Treasury. These requirements are also known as the Corporate Transparency Act (CTA).

… and we’ve already shared what may happen if you ignore completing the form:

caution, noncompliance could result in civil penalties of $500/day, criminal penalties of up to $10K, up to 2 yrs prison

It’s up to all of us to be in-the-know, to learn and share information meaningful to our homeowner communities. Lastly, WVOHOA has no idea at this time how these Federal penalties may be enforced.

again : legal information is not legal advice.


2024 Mar-01 PM 04:47
OPINION
U.S. DISTRICT COURT N.D. OF ALABAMA SealU.S. DISTRICT COURT N.D. OF ALABAMA

UPDATE – March 4, 2024 Corporate Transparency Act Challenged
FinCEN’s Public Service Announcement 
. . . final declaratory judgment, concluding that the Corporate Transparency Act exceeds the Constitution’s limits on Congress’s power and enjoining the Department of the Treasury and FinCEN from enforcing the Corporate Transparency Act against  . . .   the plaintiffs:
Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024).
Those individuals and entities are not required to report beneficial ownership information to FinCEN at this time.

This notice was updated on March 11, 2024, to reflect that a Notice of Appeal has been filed regarding this case.

yes, HOAs, Condos, and other types of planned communities continue to be required to complete the Beneficial Ownership Information form