It has been a crazy and confusing month for business owners who may have already been unclear about the requirement to report Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act (CTA). Here is a quick recap of the decisions:
On December 3, 2024, the U.S. District Court of the Eastern District of Texas ruling on the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), temporarily suspended BOI filing requirements after the Court determined that the CTA was unconsitutional and issued a nationwide preliminary injunction halting enforcement. (see previous post)
On December 23, 2024, just days before the original January 1, 2025 reporting deadline, the Fifth Circuit Court of Appeals granted the DOJ’s emergency motion, lifting the injunction and restoring the CTA requirements. FinCEN extended the deadlines in recognition of the fact that “reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect.” (see previous post)
Three days later, another Fifth Circuit panel reversed the decision and reinstated the injunction. FinCEN updated its guidance, making BOI filings voluntary until a final decision is reached.
On December 31, 2024, DOJ filed an emergency “Application for a Stay of the Injunction” with the U.S. Supreme Court to allow enforcement of the CTA during an appeal.
On January 10, 2025, the original plaintiffs in Texas Top Cop Shop, Inc., et al. v. Garland, et al. filed a response to the DOJ’s application, asking the Supreme Court to reject the DOJ’s request.
Several other cases questioning the Constitutionality of the CTA reporting requirements are also currently in progress, adding even more confusion to the issue.
Although the submission of BOI reports to FinCEN is currently not required, the recent state of flux creates uncertainty about the future enforcement of the CTA. Reporting companies should be prepared to submit BOI information promptly if required. Taxpayers can subscribe to receive FinCEN updates to be made aware of any changes.
Please reach out to a GYF Tax Professional at 412-338-9300 if you have questions or would like assistance.
Resources:
FinCEN BOI Informational Brochure
FinCEN BOI Informational Videos
Small Entity Compliance Guide for BOI Reporting Requirements
Related Posts:
ALERT: BOI Filing Requirements Restored with Extended Deadlines
UPDATE: Temporary Suspension of FinCEN BOI Filing Deadline
FinCEN BOI Filing Deadline is Rapidly Approaching
Federal CTA – Beneficial Ownership Reporting – Updates to FAQs
