Uncertain About the Reporting Deadlines for BOI?

Article Highlights:

 
• Corporate Transparency Act
 
• Beneficial Ownership Information
 
• Events Leaving Beneficial Ownership Information Reporting in Doubt
 
• History of Events
 
• Current Status

Congress approved the Corporate Transparency Act (CTA) in 2021, requiring some firms to submit Beneficial Ownership Information (BOI) starting in 2024. firms founded before 2024 had a reporting deadline of January 1, 2025, but new firms formed after 2024 had a 90-day reporting obligation. The CTA's reporting requirements are meant to prevent money laundering, tax fraud, and terrorist funding. A sequence of incidents occurred less than a month before the January 1, 2025, filing due date, casting doubt on the filing deadline and even the Constitutionality of the CTA. Here's how those events unfolded:

• On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide injunction that temporarily halted enforcement of the CTA and its Beneficial Ownership Information (BOI) reporting requirements with the Financial Crimes Enforcement Network (FinCEN) based on the CTA being unconstitutional under the Commerce Clause or Necessary and Proper Clause. On December 5, 2024, the Department of Justice filed
• On December 23, 2024, the Fifth Circuit Court of Appeals removed the injunction against all firms except the plaintiffs in the December 3 Texas District Court Case.
• The Fifth Circuit Court of Appeals reinstated the stay on December 26, 2024, with a hearing planned on March 25, 2025. This suspends the BOI filing deadlines for firms with FinCEN.
• On December 31, 2024, the Department of Justice (DOJ) petitioned the Supreme Court (SCOTUS) to stay the district court's injunction. The DOJ argued that the Corporate Transparency Act's reporting requirements are crucial for combating money laundering, tax fraud, and terrorism financing, and fall within Congress's authority under the Comm. As of the publication of this article, SCOTUS has not taken any action.
• On January 15, 2025, Senator Tommy Tuberville (R-AL) reintroduced the Repealing Big Brother Overreach Act, which aims to repeal the CTA and eliminate the need for BOI reports. At the same time, Congressman Warren Davidson (R-OH) reintroduced related legislation in the US House of Representatives.
• On January 23, 2025, the Supreme Court stayed a countrywide order that suspended the implementation of beneficial ownership information (BOI) reporting requirements. The stay will be in force until the Fifth Circuit acts, and the Supreme Court may conduct additional review.

FinCEN gave an update on January 24, 2025: "On January 23, 2025, the Supreme Court granted the government's motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry-formerly, Texas Top Cop Shop v. Garland)."Despite the Supreme Court's decision in Texas Top Cop Shop, reporting corporations are still not obliged to submit beneficial ownership information with FinCEN because to a second national ruling granted by a different federal court in Texas (Smith v. U.S. Department of the Treasury). Reporting firms are not accountable if they fail to submit this information while the Smith order is in effect. However, reporting organizations may continue to voluntarily provide beneficial ownership information reports."

Companies subject to BOI reporting

Include corporations, limited liability companies, and entities formed by submitting a document with a secretary of state or equivalent authority under state or Indian tribal law. This normally involves restricted partnerships, although it may also include general partnerships depending on state or tribal laws.

A foreign corporation, limited liability company, or other entity formed under foreign law and registered to do business in any U.S. state or Tribal jurisdiction by filing a document with a secretary of state or similar office under the law of a U.S. state or Indian tribe.

The Current Status

As a beneficial owner of a firm subject to the BOI reporting obligation, as of January 24, 2025, the date of this article

The reporting obligation remains suspended.

When the initial injunction was lifted, FinCEN extended the filing due date. There is no reason to suppose they will not do it again if and when the injunction is removed. However, the extension FinCEN was planning to grant was for less than two weeks, so if the BOI reporting requirement is reintroduced, anticipate any extended deadline to be brief.

If you have previously fulfilled the BOI reporting obligations, there is nothing to worry about. However, if the reporting obligation is reestablished, keep in mind that the information must be updated whenever anything changes.

FinCEN currently accepts BOI reporting on their website, allowing you to complete the initial report without worrying about deadlines if the need is revived.

Stay tuned! Please contact this office if you have any queries.