Days after the US Circuit Court of Appeals effectively reinstated Beneficial Ownership Information reporting requirements, on December 26, 2024 the court reinstated the nationwide injunction issued by a federal judge in Texas Top Cop Shop, Inc, v. Garland. What does the latest ruling mean for small businesses?
No Filing Required Right Now
A federal court issued a nationwide order saying businesses don’t currently have to file their beneficial ownership information (BOI) with FinCEN. You also won’t face penalties for not filing while this order is in place.
Voluntary Filing Is Still an Option
Even though it’s not required, businesses can choose to submit their BOI reports voluntarily. FinCEN’s BOI page shares the following update:
“In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
Why This Happened
The case (Texas Top Cop Shop, Inc. v. Garland) challenged the legality of the Corporate Transparency Act, and the court issued an injunction temporarily halting enforcement of the BOI filing requirement on December 3rd, 2024.
On December 23rd, 2024, a panel of the US Court of Appeals for the Fifth Circuit initially ruled in favor of the Corporate Transparency Act’s legality, overturning the December 3rd ruling. This ruling reinstated the filing requirements, and FinCEN immediately extended deadlines.
On December 26th, a second Fifth Circuit Court of Appeals panel vacated the December 23rd ruling. This ruling issued a stay of preliminary injunction meaning that BOI reporting requirements are not in effect. This ruling applies nationwide for now.
What’s Next?
The Department of Justice and Treasury Department continue to express confidence in the CTA’s constitutionality and are appealing the decision.
We will continue to keep you updated on developments as they occur. If you have any questions, do not hesitate to reach out to your Wegner CPAs business advisor.
Looking for more information on BOI requirements? Visit our BOI and CTA Frequently Asked Questions and BOI and CTA Resource pages.
