Treasury Department confirms HOAs and COAs in the U.S. will no longer face fines for not filing the BOIR
Condo associations and homeowners associations watch back-and-forth debate about the Beneficial Ownership Information Report
Updated on March 3, 2025: The Treasury Department has confirmed that it will not enforce fines and penalties for U.S. small businesses and LLCs, including HOAs and COAs, for not filling out the BOI report by March 21, 2025 or any time afterward. The Treasury Department is, however, looking into the possibility of making foreign businesses use this system while doing business in the U.S.
Updated on February 28, 2025: FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies who have not filed the BOI report by the latest March deadline. pursuant to the Corporate Transparency Act.
Updated on February 22, 2025: On February 18, 2025, BOIR requirements under the CTA are mandatory (again). The new deadline to file is March 21, 2025. Although the Republican-led House of Representatives would like to amend this deadline until January 1, 2026 (via bill H. R. 736), their bill has not gone to the Senate. There has been further discussion about waiving “low-risk” organizations, but there is nothing confirming some small businesses (outside of the ones mentioned below) can opt out. As of now, all LLCs, corporations and foreign businesses working within the U.S. must follow the new March 21, 2025 deadline or risk up to $10K in fees and potential prison time.
Recommended Read: “Treasury Department suspends all potential fines for U.S. business owners who don’t file BOIR”
Updated on January 24, 2025: On Thursday, January 23, the Supreme Court OK’d owners of millions of small businesses (including homeowners associations and condo associations listed as LLCs) to continue registering their businesses. The goal is to fight against money laundering and other financial crimes. Owners and part-owners of any small businesses (an estimate of 32.6 million nationwide) can register personal information with Treasury’s Financial Crimes Enforcement Network (FinCEN). The Supreme Court chose not to step in before the lower courts finish bickering it out, but they also didn’t allow opposition to treat the Beneficial Ownership Information Report (BOIR) the way Alabama does by banning it altogether. HOAs and COAs can click here to file now, and avoid the potential for a civil penalty of $591 to $10,000 in fines and imprisonment for up to two years.
Updated on December 30, 2024: Three days after the new January 13, 2025 deadline was confirmed on December 26, the full Fifth Circuit vacated the stay courtesy of the merits panel of the Fifth Circuit. BOIR filing is back to being voluntary. While HOAs can continue voluntarily submitting their info to avoid the back-and-forth debates in court, there will currently be no fine.
Updated on December 26, 2024: On December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit granted the U.S. government’s request for an emergency stay of a nationwide preliminary injunction blocking enforcement of the Corporate Transparency Act (CTA). Companies that had held off on filing until the appeals decision was made now have until January 13, 2025 to file instead of the original deadline of January 1, 2025. HOAs and COAs can file for free, but the information should be completed online or by submitting a PDF.
Updated on December 9, 2024: Last Tuesday, December 3, 2024, the U.S. District Court for the Eastern District of Texas issued an order in favor of the plaintiffs in Texas Cop Shop, Inc. et al. v. Garland et al. The results temporarily halt the enforcement of the beneficial ownership information (BOI) reporting requirements established by the Corporate Transparency Act (CTA). Although HOAs and COAs can voluntarily submit their information, they are temporarily not subject to the January 1, 2025 deadline (or fine) if they don’t initially file the BOI at this time. The Department of the Treasury is appealing that order.
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Original post August 2, 2024
If you’re a member of a homeowners association (HOA) or condo association (COA), electronic filing for the Beneficial Ownership Information Report (BOIR) should be a top priority — especially to avoid the $591 fine that can run up to $10K and jail time. Under the Corporate Transparency Act (CTA), companies — including limited liability companies (LLCs) and 501(c)(4) — are required to report ownership information to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.
There is no monetary charge to file, and it can securely be done here. After initial BOI reporting, additional filing would only be required if there are significant changes. Unlike LLCs, which include a yearly renewal fee, annual board member updates and confirmation of the registered agent to avoid being labeled “not in good standing” or “involuntary dissolution,” one BOI reporting will suffice.
Which HOAs and COAs have to submit a BOI Report? And when?
Financial Crimes Enforcement Network (FinCEN) began accepting reports on January 1, 2024. Any company that was created or registered prior to January 1, 2024 will have until January 1, 2025 to report BOI.
If your HOA or COA was created or registered in 2024, you must report your BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
If your HOA or COA is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
Why are HOAs and COAs included in BOI reporting if they’re nonprofits?
First, a 501(c)(3) and a 501(c)(4) are not the same — and neither exemption matters in this case.
According to the IRS, like any Section 501(c)(4) social welfare organization, a homeowners association described under Section 501(c)(4) is required to be operated exclusively for the promotion of social welfare by primarily promoting the common good and general welfare of the people of the community. Homeowners associations benefit certain individuals, typically their members.
Although HOAs and COAs are often nonprofits, because they’re designed for upkeep of the building or neighborhood instead of being a for-profit organization, they’re not always tax exempt. And if they run any kind of for-profit business (ex. selling merchandise or running a local business within the building or block), they’re definitely going to have to pay taxes on those earnings.
On a separate note: A homeowners’ association that is not exempt under section 501(c)(4) and that is a condominium management association, a residential real estate management association, or a timeshare association generally may elect under the provisions of Code section 528 to receive certain tax benefits that, in effect, permit it to exclude its exempt function income from its gross income. -IRS
For federal tax purposes, homeowners associations are considered corporations, regardless of whether they were created as a nonprofit. Therefore, the association must file annual taxes as a corporation and would need to file the BOI form like any other business.
What happens to HOAs and COAs who don’t file BOI?
In 2021, Congress enacted the bipartisan Corporate Transparency Act to curb illicit finance. This law requires many companies doing business in the United States to report information about who ultimately owns or controls them.
However, the Corporate Transparency Act (CTA) was declared unconstitutional on March 1, 2024 by a federal judge in the U.S. District Court for the Northern District of Alabama. This means Alabama HOAs and Alabama COAs can be excluded from this 2024-25 deadline (as of the date of this publication).
In the National Small Business United v. Yellen decision, the district court also allows members (as of March 1, 2024) in the National Small Business Association (NSBA) to skip the BOI reporting. Twenty-three other types of entities are also exempt from BOI reporting requirements, including publicly traded companies, investment companies, banks and credit unions, and specific nonprofits.
Anyone outside of these groups, including HOAs and COAs, will be fined $591 per day and up to $10K for not filing the BOI after January 1, 2025.
More information on BOI
Click here for the Beneficial Ownership Information Reference Guide.
Click here to download the BOI PDF form or file online.
Click here to download step-by-step instructions.
Click here to visit the official Financial Crimes Enforcement Network site.
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