Update 2/18/25 :
BOI reporting is back on. The US District Court granted a stay in the Smith v US DoT case, meaning that the Corporate Transparency Act (CTA) and the beneficial ownership information (BOI) reporting requirements under the CTA are now back in effect. Most companies have until March 21, 2025 to file. Read more
Update 2/14/25:
FinCEN updated guidance for filing deadlines in the event the current injunctions are stayed. For now, BOI reporting is still voluntary. However, if the government’s stay is granted, most businesses will have 30 days from the date the stay is granted to file. Read more
Update 1/24/25:
On January 23, 2025, the US Supreme Court issued a ruling that lifted the nationwide injunction delaying the enforcement of Beneficial Ownership Information reporting under the Corporate Transparency Act. FinCEN has clarified that this new ruling conflicts with a prior block meaning BOI reporting requirements are still on hold. Read more
Update 1/2/25:
A second panel from the Fifth Circuit Court of Appeals overturned its ruling (12/23/24) on December 26th, 2024. As of 12/26/24, no businesses are required to file Beneficial Ownership Information reports to FinCEN. Read more.
Update 12/24/24:
The Fifth Circuit Court of Appeals has reinstated Beneficial Ownership Information (BOI) reporting requirements for small businesses under the Corporate Transparency Act (CTA). This decision overturns the previous injunction, and businesses must now file to avoid penalties. FinCEN has extended deadlines for most filers. Read more
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction blocking the U.S. Department of Treasury from enforcing the Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting requirements.
The court’s decision in Texas Top Cop Shop, Inc., et al. v. Garland, et al. – a lawsuit filed by the National Federation of Independent Business (NFIB) – concluded that the CTA is likely unconstitutional in that it exceeds Congress’s constitutional authority. The Court held that the CTA likely does not regulate interstate commerce and is not justified under Congress’s power to enact laws “Necessary and Proper” to lay and collect taxes.
What Does This Mean?
The nationwide injunction issued by the court effectively stops the enforcement of the CTA and its implementing regulations around the country. This injunction (although temporary) also stops the obligation for business owners to comply with the CTA’s reporting requirements and providing ownership information to FINCEN by January 1, 2025. The practical effect of this injunction is that the federal government must refrain from imposing penalties and requiring compliance with the CTA until further legal determinations are made regarding the constitutionality and implementation of this injunction.
Although no public announcement has yet been made, the federal government is expected to quickly appeal the court’s decision. CTA and Beneficial Ownership reporting would resume if the injunction is later reversed.
In a recent article, Forbes provides more details and guidance in regard to the ruling. In the meantime, there has been a pause to any further compliance with the CTA . Entities that have not yet filed can delay filing as there is no requirement under this injunction.
Wegner CPAs will keep you informed on this matter as developments occur.
