The Art of Exceeding Client Expectations: Small Actions, Big Impact
February 4, 2025
- Business, Consulting, Corporate, Employment, Tax, Thought Leadership
BOI Reporting Still on Hold – Latest Developments with the Corporate Transparency Act
- By Emily Wisniewski
CTA Overview
We wanted to provide you with recent updates on the Corporate Transparency Act (“CTA”). Under the CTA, FinCEN (the “Financial Crimes Enforcement Network of the U.S. Treasury”) is required to develop a nationwide database of private company “beneficial owners”. The CTA requires most small companies in the U.S. to file beneficial ownership information (“BOI”) reports with FinCEN.
Update
In December 2024, a Federal District Court in Texas issued a nationwide preliminary injunction against the CTA finding that the CTA and the Reporting Rule likely violate constitutional protections. The Fifth Circuit of Appeals issued a stay and lifted the injunction. However, only a few days later, the merits panel of the Fifth Circuit Appeals Court reinstated the nationwide injunction against the CTA. On December 23, 2024, the Fifth Circuit Court of Appeals issued a stay and lifted the injunction, reinstating the reporting requirement. The government asked the Supreme Court to stay the injunction.
On January 23, 2025, the Supreme Court granted the stay and lifted the nationwide injunction against the CTA.
Does this mean you have to file a BOI report?
Not exactly. While the Supreme Court stayed the nationwide injunction in this case (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland), there is a separate nationwide injunction issued by a different federal judge in Texas that is still in place (Smith v. U.S. Department of the Treasury).
Which means the requirements to file a BOI report are still temporarily suspended.
What Should I Do?
There are two main options at this time:
- Prepare your BOI report but do not file.
- File your BOI report voluntarily.
This situation continues to develop. We are recommending that businesses have a BOI report ready to go at a moment’s notice if the filing once again becomes effective.
Please let us know immediately if you need our assistance with preparing and filing the BOI report.
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