There has been yet another court decision surrounding the Corporate Transparency Act (“CTA”) and its impending deadlines.
Just a few days ago, we sent you communication regarding the Financial Crimes Enforcement Network’s (“FinCEN”) January 13, 2025 extension to file beneficial ownership information (BOI) reports for most reporting companies.
In the latest development, it appears that reporting companies may once again be relieved of their BOI reporting obligations.
Here’s what happened:
- On December 13, 2024, the U.S. Department of Justice (DOJ) filed an emergency motion with the U.S. Court of Appeals for the Fifth Circuit to stay, or put on hold, the nationwide temporary preliminary injunction that halted all required filings pursuant to the Corporate Transparency Act (CTA) on December 3, 2024.
- On December 23, 2024, the Fifth Circuit granted the DOJ’s motion for a stay of the preliminary injunction.
- FinCEN, which enforces the CTA, extended the deadline for most reporting companies to file beneficial ownership information (BOI) reports to January 13, 2025.
Here’s the latest news:
- On December 26, 2024, the Fifth Circuit vacated the stay (hold) and again halted the enforcement of the CTA nationwide.
- As a result of the above order, reporting companies are once more relieved of their BOI reporting obligations and FinCEN’s reporting deadlines are no longer enforceable (for the moment).
- We’re still awaiting a statement from FinCEN.
- The court’s latest decision reinstates the nationwide CTA injunction, blocking the BOI reporting requirements for reporting entities while the court fully considers the government’s appeal.
Here’s what you need to know:
- As of right now, the BOI reporting requirements cannot be enforced by FinCEN.
- FinCEN has not yet issued a statement, but it is anticipated that it will comply with the injunction while continuing to allow businesses to voluntarily submit BOI reports.
- While this injunction remains in effect, there is no requirement for reporting entities to comply with the CTA, including the upcoming January 1, 2025 deadline (and subsequent January 13, 2025 extension) for filing beneficial ownership reports for existing entities, as well as any additional filings previously required for new entities formed during 2024 or 2025.
We realize the back and forth with multiple court decisions around the CTA can be concerning, so we will continue to keep you updated on further developments.
We want to reiterate that it is truly in your best interest to speak with an attorney regarding the CTA. As the CTA is not a tax matter or part of the tax code, and is also not within the scope of our client engagement or services provided to you, we are not able to provide you with any legal advice or counsel regarding the CTA. Attorneys have a particular expertise in this area and are the best equipped to help you.