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We need your help!

Your Community, The Wright Community Management and CEOMC need your help!


On July 15, 2024, Representative Richard McCormick (R-GA-6) introduced H.R. 9045 - To amend title 31, United States Code, to exempt entities subject to taxation under section 528 of the Internal Revenue Code of 1986 from certain beneficial ownership reporting requirements. H.R. 9045 would exempt community associations from the requirements of the Corporate Transparency Act, codifying a needed protection for you and your community. It is imperative that Members of the House agree to Co-Sponsor H.R. 9045, and that the Senate introduce a companion bill. Please reach out to your Member of Congress, even if you have done so already about the Corporate Transparency Act!


 

Click below to Contact Your Member of Congress


 

About the Corporate Transparency Act


The Corporate Transparency Act’s current filing deadline for existing corporations is January 1, 2025, and your community association is currently required to file annually the following information to the Financial Crimes Enforcement Network (FinCEN):


1.Business name. 

2.Legal name of board members, birthdate, home address, an identifying number from a driver’s license, state ID, or passport. 

3.Individual with substantial control. The same information (name, birthdate, home address, identifying number) of person (s) who exercise substantial control over financial reporting for the community association corporation. It is unclear whether a community manager and/or management company qualify as an individual with substantial control. This is yet to be confirmed. CAI will continue to evaluate this and provide guidance accordingly. 

4.Changes, corrections, and additions to the filing must occur within 30 days of when you become aware of the change (i.e., board member moves, is replaced, etc.).

Noncompliance of filing could result in civil penalties of $500 per day and criminal penalties of up to $10,000 and up to 24 months in prison. We need your help to get community associations exempted from the Corporate Transparency Act’s filing requirements!


The intent of the legislation was to help detect and report suspicious activity related to money laundering and terrorist finance, to facilitate tracking money that has been sourced through criminal or terrorist activity to safeguard the national security and the financial system of the U.S. This law applies to corporations that have less than $5 million in gross receipts or sales, fewer than 20 employees, and don’t otherwise meet broad exemptions like banks, credit unions, investment companies, venture capital, securities exchange or clearing agency, insurance companies, public utilities, accounting firms, tax-exempt organizations as qualified and determined with status by the IRS, i.e. 501c4 organizations, large operating companies, and inactive entities. The consensus by community association lawyers is community associations incorporated at the state level will be impacted by this new law and will have a responsibility to file information with FinCEN through the Beneficial Ownership Information reporting requirements.The legislation explicitly outlines 23 exemptions from reporting requirements (with power reserved for additional exemptions via regulatory action), and one exemption is granted to IRS tax-exempt organizations. Community associations operate like tax-exempt entities—with many small assessments and constrained expenditures. We assert that our members should be extended the same exemption afforded to tax-exempt organizations as outlined in the law. The legislation also explicitly exempts entities that exercise governmental authority. Community associations, while private, exist primarily to govern common interest communities. They are providers of essential services similar to local governments.


Please, take time today to reach out to your representatives in Congress and ask them to support H.R. 9045, and to share this important request with your neighbors!

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