IMPORTANT UPDATE – February, 2025 On February 18, 2025, following a decision by the U.S. District Court for the Eastern District of Texas in Smith v. U.S. Department of Treasury, et al., 6:24-cv-00336 (E.D. Tex.), beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (“CTA”) are once again back in effect with a new deadline of March 21, 2025.
BOI Reporting Paused … Again
Despite the Supreme Court’s granting the government’s motion to stay a nationwide injunction, as a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN.
This means that the government cannot enforce the CTA and BOI reporting requirements and small businesses are under no obligation to file these reports while the court decides the case. NOTE: Warady & Davis LLP and the AICPA, however, continue to recommend that small business owners should remain ready to file BOI reports, as this week’s legal rollercoaster demonstrates that the injunction can be reversed at anytime. The latest injunction will remain in place while the lawsuit proceeds or until the court says otherwise.
Background
On Dec. 23, the Fifth Circuit lifted a nationwide injunction issued by the district court judge earlier this month in a Texas lawsuit challenging the Corporate Transparency Act, which requires covered businesses to report their beneficial ownership information to the Financial Crimes Enforcement Network. Three days later, “in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments,” the panel of Fifth Circuit judges that will consider the merits of the government’s appeal of the preliminary injunction vacated that decision and once again enjoined enforcement of the reporting rule and CTA.
The lawsuit in Texas was filed by the National Federation of Independent Business and several of its members. The plaintiffs argued that the CTA exceeded Congress’ authority to regulate interstate commerce, that it violates the First Amendment by compelling speech and infringing freedom of association and that it violates the Fourth Amendment by forcing the disclosure of private information.
Businesses should monitor FinCEN’s BOI page for updates, revised deadlines and reporting instructions.
More Information
For more information regarding the BOI reporting requirements including FAQs and a helpful short instructional video visit https://www.fincen.gov/boi. The AICPA has also created a BOI reporting resource center.
Warady & Davis LLP will continue to keep you informed regarding BOI Reporting requirements as new developments unfold. You may also contact your Warady & Davis LLP business advisor with any additional questions or concerns – (847) 267-9600 or [email protected].
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