BOI REPORTING STATUS UPDATE
On December 26th, the 5th Circuit reinstated the pause on the beneficial ownership report filing requirements.
HOW DID WE GET HERE?
The Corporate Transparency Act (CTA) went into effect on January 1, 2024 and required all entities that qualified as reporting companies to file beneficial ownership information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN). Several court cases have been filed this year challenging the constitutionality of the CTA. One such case was Texas Top Cop Shop, Inc., et al. v. Garland, et al. On December 3rd, 2024, the Eastern District of Texas issued a nationwide preliminary injunction in this case, which suspended enforcement of the CTA.
The government appealed this injunction and on December 23rd the 5th Circuit Court of Appeals stayed the injunction and reinstated the January 1, 2025 deadline for BOI report filings. FinCEN then voluntarily extended the deadline to January 13, 2025.
Now, the 5th Circuit has reversed its December 23rd Order and vacated the stay in light of the expedited ruling expected on the merits of the preliminary injunction.
WHAT DOES THIS MEAN FOR MY ENTITY?
Since the injunction is currently in effect, entities are not required to file BOI reports. However, FinCEN will continue to accept filings on a voluntary basis while the litigation is ongoing.
If you choose not to file a BOI report at this time, it is important that you continue to monitor the ongoing litigation and be prepared to file your BOI report on short notice. If you do not want to keep up with the litigation status and want to avoid a potential rush to file before any new deadline, we recommend that you go ahead and voluntarily file your BOI report.
For further information regarding this, please contact by phone at (404) 365-5682 or email us at jmartin@ttmlawyers.com
