On January 23, 2025, the U.S. Supreme Court stayed the preliminary injunction issued by the District Court for the Eastern District of Texas. Financial Crimes Enforcement Network (FinCEN) may again enforce the Corporate Transparency Act (CTA) and BOI reporting. Discuss this ruling with your attorney and how it may impact your company’s reporting obligations under the CTA.
A district court in Texas issued an order on December 3, 2024, to restrain FinCEN from enforcing the Corporate Transparency Act and its BOI reporting requirements. The Texas Top Cop Shop, Inc. et al. V. Garland case is on appeal to the Fifth Circuit to consider the lower court’s ruling that the CTA’s BOI reporting requirement is in violation of the U.S. Constitution. There are several other legal challenges to BOI reporting in district and appellate courts across the country.
Impact of Supreme Court Ruling on CTA Compliance
On Thursday, January 23, 2025, the U.S. Supreme Court stayed the district court’s nationwide injunction that has barred the FinCEN division of the U.S. Treasury from enforcing BOI reporting. This ruling will allow the government to implement its system of reporting and apply fines to companies for failure to report beneficial owner information in a timely manner. Fines can be as much as $500 per day for knowingly failing to file.
It is not clear if FinCEN will extend the required filing date for existing businesses as it did in December 2024 when the injunction was briefly lifted by the Fifth Circuit Court of Appeals. At that time, FinCEN advanced the filing date to January 13, 2025.
Navigating BOI Reporting Requirements Under the CTA
Cherry Bekaert is not offering consulting or compliance assistance to clients for BOI reporting under the CTA. We recommend that clients view the FAQs and "Small Entity Compliance Guide" posted on the Financial Crimes Enforcement Network website (Small Business Resources | FinCEN.gov). We also encourage businesses, owners and executives to discuss BOI reporting with their attorneys.
