Protecting Community Associations: CAI Files Lawsuit Against the United States Department of Treasury
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Protecting Community Associations: CAI Files Lawsuit Against the United States Department of Treasury

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On September 10, 2024, the Community Associations Institute (CAI) filed a lawsuit against the U.S. Department of Treasury challenging the application of the Corporate Transparency Act (CTA) to community associations. CAI argues that community associations, as nonprofit organizations under IRS section 528, should be exempt from the CTA's beneficial ownership filing requirements. The lawsuit claims that the Financial Crimes Enforcement Network (FinCEN) failed to follow proper rulemaking procedures, acted arbitrarily by not exempting community associations, and violated constitutional rights by imposing invasive reporting requirements.

Additionally, CAI asserts that the act exceeds federal authority by infringing on state powers and discriminates against community associations compared to other nonprofits. CAI seeks a judicial review and a preliminary injunction to halt CTA enforcement until a court ruling is made, while the compliance deadline of January 1, 2025, remains.

Learn more here.