Key Takeaways
- On Feb. 17, the district court granted the government’s motion for an immediate stay pending appeal of the nationwide order staying the effective date of the Corporate Transparency Act’s (CTA) reporting rule.
- In a public alert published on Feb. 19, the Financial Crimes Enforcement Network (FinCEN) extended the reporting deadline for nearly all reporting companies to March 21.
- During the period prior to the deadline, FinCEN will assess its options to narrow the reporting requirements for lower-risk entities.
Government Wins Immediate Stay
On Feb. 17, the Texas federal district court in Smith v. U.S. Department of the Treasury granted the government’s motion for an immediate stay pending appeal of the nationwide order staying the effective date of the final rule establishing the CTA’s reporting requirements and deadlines.
New Reporting Deadline of March 21 for Most Reporting Companies
In a public alert published on Feb. 19, FinCEN established a reporting deadline of March 21 for nearly all reporting companies to file an initial, updated and/or corrected beneficial ownership information (BOI) report. The exceptions to this new deadline are limited to (i) those reporting companies that qualified for certain disaster relief extensions providing for a deadline later than March 21 and (ii) the plaintiffs in National Small Business United v. Yellen, No. 5:22-cv01448 (N.D. Ala.), for as long as that limited order remains in effect.
FinCEN reiterated in the alert that during the period prior to the reporting deadline, it will “assess its options to modify further deadlines, while prioritizing reporting for those entities that pose the most significant national security risks.” FinCEN also intends to begin a process to revise the BOI reporting rule to reduce the burden for lower-risk entities, including small businesses.
In its notice, FinCEN also seemed to imply that the new deadline could be further extended, stating that it “will provide an update before [March 21] of any further modification of this deadline.”
Potential Congressional Action
Although FinCEN has established a reporting deadline of March 21, efforts are underway in Congress to delay the reporting deadline until Jan. 1, 2026, including one bill that recently passed the House of Representatives with a 408-0 vote. That bill currently sits in front of the Senate, where the timing and odds of such amendment being passed remain unclear.
We will continue to provide updates regarding further material developments as they arise.
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