Flip-Flop: The Corporate Transparency Act Requiring Small Businesses to Report Beneficial Ownership Information Gets Temporarily Blocked... AGAIN

 

Where does the Corporate Transparency Act (CTA) stand today?

As of today (01/07/25), the CTA was once again temporarily blocked by an injunction in a federal court. We highly recommend that you go ahead and prepare your beneficial ownership information (BOI) report in case the requirement gets reinstated. We understand that the legal battle has made this more confusing, and we are doing our best to keep you updated.

 

Here is a timeline of events pertaining to reporting BOI:

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January 1, 2021 - The bipartisan Corporate Transparency Act (CTA) is enacted to curb illicit finance, and requires many companies doing business in the United States to report information about the individuals who ultimately own or control them.

 

January 1, 2024 - The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, begins accepting beneficial ownership information (BOI) reports required by the CTA. Existing companies created or registered to do business in the United States before January 1, 2024 were required file by January 1, 2025. Newly created or registered companies during 2024 were given 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.

 

December 3, 2024 - The CTA and its implementing regulations were preliminarily blocked nationwide by a federal court (Texas Top Cop Shop, Inc. v. Garland, No. 4:24-CV-478, 2024 No. 24-40792 WL 5049220 (E.D. Tex. Dec. 5, 2024)). The injunction came just a few weeks before the January 1, 2025 deadline for compliance. The injunction temporarily barred the Treasury Department from enforcing the reporting requirements.

 

December 23, 2024 - An appellate court panel granted the government's emergency motion for a stay pending appeal (Texas Top Cop Shop, Inc. v. Garland, No. 24-40792, 2024 WL 5203138 (5th Cir. Dec. 23, 2024)). The order also expedited the appeal to the next available oral argument panel.

 

December 24, 2024 - FinCEN extended the BOI reporting deadline to January 13, 2025.

 

December 26, 2024 - The U.S. Court of Appeals for the Fifth Circuit reinstated the injunction, reversing its earlier decision to lift it. The injunction prevents the enforcement of the CTA and its reporting requirements, including BOI reports that were due by January 13, 2025.

 

We will be watching this case closely as it progresses and inform our clients of next steps. Watch your email for follow ups. To learn more or prepare your report, visit FinCEN's Small Entity Compliance Guide, which is available in multiple languages.

 

ALWAYS beware of fraudulent attempts to solicit your information!