Federal Reporting Requirement: Beneficial Ownership Reporting Rule (BOI) Filing Requirement Currently Suspended
IMPORTANT UPDATE | March 7, 2025
- Beneficial Ownership Information (BOI) Reporting Requirements Suspended. Here’s a summary of the developments: U.S. Treasury Issues New Guidance: Beneficial Ownership Information (BOI) Reporting Requirements Suspended
IMPORTANT UPDATE | February 21, 2025
- The Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are back in effect, with a new filing deadline of March 21, 2025. Here’s a summary of the developments: New Court Decision Issued Beneficial Ownership Information (BOI) Reporting Now Due March 21, 2025
IMPORTANT UPDATE | January 29, 2025
What Happened?
We previously communicated information related to the new BOI filing requirements and related January 1, 2025 due date (New Federal Reporting Requirement: Beneficial Ownership Reporting Rule).
There have been recent court decisions related to the constitutionality of the Corporate Transparency Act’s BOI reporting rules enforced by the Financial Crimes Enforcement Network (FinCEN):
- December 3rd a federal District Court Judge in Texas ruled that the Corporate Transparency Act and related BOI filing requirements are “likely” unconstitutional and issued a nationwide temporary injunction to prevent their enforcement. Unlike a previous ruling in Alabama, this injunction applies to all business entities.
- December 5th the Department of Justice filed an appeal and shortly thereafter filed an emergency appeal requesting that the temporary injunction be lifted until the case has been decided.
- December 17th a 1,500-page budget bill is introduced in Congress and includes a provision to delay BOI reporting until Jan 1, 2026. On December 21st a 118-page budget bill is enacted by Congress and does not include the BOI provision.
- December 23rd the 5th Circuit Court of Appeals lifts the temporary injunction. FinCEN announces a deferred filing date of January 13, 2025.
- December 27th another panel of judges in the 5th Circuit ruled that the injunction was proper and should therefore remain in effect. The Court is scheduled to hear oral arguments on March 25th.
- December 31st the Department of Justice filed an emergency application with the U.S. Supreme Court to cancel the 5th Circuit’s injunction and reinstate BOI filing requirements. The plaintiffs have until January 10, 2025, to submit their response.
- January 7th a Texas District Court judge in the case of Smith vs U.S Department of Treasury issued an order to “stay the effective date” of the BOI reporting rule while the lawsuit was pending. The Department of Justice has not yet filed an appeal.
- January 23rd the U.S. Supreme Court issued its ruling regarding the nation-wide injunction on BOI reporting requirements issued by a Texas Federal District Judge in the matter of Texas Top Cop Shop, Inc. The Court ruled that the injunction should not be enforced so it appeared that BOI filings would once again be required. The Court did not address the issue of the legality of a Federal District Court to issue a nationwide injunction.
- January 24th FinCEN issued the following statement:
- On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas. 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 despite the Supreme Court’s action. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
Where Do We Stand Now?
With the court order of January 7th staying the enforcement of BOI reporting in force, the requirement to file BOI reports is no longer in effect. The injunction applies to all entities currently in existence and those created after January 7th. FinCEN has acknowledged this on its website:
In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
What Should You Do Now?
Clearly, the latest rulings add more confusion to the BOI program and create a split among several federal district courts. The BOI reporting enforcement plans of the new Administration in Washington are not yet known and there are currently two companion bills in the House and Senate to repeal the Corporate Transparency Act and its related BOI filing requirements. The situation is very dynamic and unpredictable.
Businesses who have not yet filed have a few choices:
- Voluntarily file
- Compile the information and documents needed for filing to be ready if and when the filing requirements are reinstated.
- Do nothing and wait until the matter is resolved by the courts.
Option #3 is not recommended as this could leave you unprepared and possibly facing a short filing window.
We will keep you posted on further developments.
Please contact us with any questions.
