The U.S. Court of Appeals for the Fifth Circuit has lifted the nationwide injunction against the enforcement of the Corporate Transparency Act (CTA), reinstating the requirement for businesses to report Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN).
The injunction was initially issued on December 3, 2024, by the U.S. District Court of the Eastern District of Texas in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.) See our previous post for more information regarding the injunction.
The Fifth Circuit order reinforcing the CTA comes just days before the original January 1, 2025 reporting deadline. Given the timing, FinCEN has issued an alert extending the reporting 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.”
Revised Reporting Deadlines:
- Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
- Reporting companies created or registered in the United States on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN.
- Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
- Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
- Reporting companies that are created or registered in the United States on or after January 1, 2025 have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.
- As indicated in the alert titled “Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)”, Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)—namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024)—are not currently required to report their beneficial ownership information to FinCEN at this time.
The Department of Justice (DOJ) filed a notice of appeal two days after the issuance of the injunction on December 3, 2024, asking the Fifth Circuit to rule on its request for a stay by December 27 “to ensure that regulated entities can be made aware of their obligation to comply before Jan. 1, 2025.”
The case is still being litigated. But in its order, the Fifth Circuit said that “the government has made a strong showing that it is likely to succeed on the merits in defending CTA’s constitutionality.”
The AICPA and state CPA societies have extensively advocated for a postponement of the BOI reporting deadline by writing numerous letters to Congress and FinCEN. While a proposed spending bill in the House of Representatives last week included a one-year extension for BOI reporting requirements, the final version passed by Congress late Friday to avert a government shutdown omitted any provisions related to the BOI deadline.
If you have any questions, please reach out to your GYF executive at 412-338-9300.
Resources:
FinCEN BOI Informational Brochure
FinCEN BOI Informational Videos
Small Entity Compliance Guide for BOI Reporting Requirements
Related Posts:
UPDATE: Temporary Suspension of FinCEN BOI Filing Deadline
FinCEN BOI Filing Deadline is Rapidly Approaching
Federal CTA – Beneficial Ownership Reporting – Updates to FAQs
