In the latest twist involving the Corporate Transparency Act (CTA), the only nationwide injunction still in effect that barred enforcement of the CTA’s filing deadlines (Smith vs. U.S. Department of the Treasury) was stayed on Tuesday, February 18, pending the government’s appeal of the case. Later that day, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced that, in light of the court’s stay, "beneficial ownership information (BOI) reporting requirements under the CTA are once again back in effect," with a new filing deadline of March 21, 2025, for the vast majority of reporting companies.
This latest development in the "on again, off again" status of the CTA’s requirements was not unexpected, given that last month the United States Supreme Court imposed a temporary stay of a similar preliminary injunction issued in another case (McHenry vs. Texas Top Cop Shop) challenging the constitutionality of the act. This will likely not be the final twist in the legal saga of the controversial act. The government’s appeals in the Smith and Texas Top Cop Shop cases will be ruled on, then almost certainly appealed to the Supreme Court, in the coming months. There are also other cases challenging the CTA that are working their way through the system, as well as legislative initiatives to postpone the filing dates for or otherwise amend the CTA.
Moreover, in its February 18 announcement, FinCEN introduced even more uncertainty about the future of the CTA’s filing requirements, cryptically stating that over the next 30 days it "will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses." The announcement also said that before the new March 21 deadline, FinCEN would "provide an update … of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided."
For now, companies organized in the U.S. should assume that the March 21 deadline will remain in effect. Those that have not already done so should immediately determine whether they qualify for any of the exemptions set forth in the CTA and, if not, proceed to gather the required BOI and make the filing prior to March 21, 2025, in order to meet the new deadline.
Information concerning the exemptions, the BOI and other information to be included in the filing, the filing process, and the penalties for noncompliance can be found in the prior Parker Poe client alerts about the CTA linked below:
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