What You Need to Know
The Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury reset Corporate Transparency Act (CTA) reporting deadlines.[i] However, on December 26, 2024, the Fifth Circuit Court of Appeals issued a new order vacating a stay, effectively reinstating the nationwide preliminary injunction. As a result, the reporting requirements of the CTA – that is, requirements to report BOI – are once again enjoined nationwide, and enforcement remains suspended pending further proceedings. Accordingly, the new filing deadlines recently announced by FinCEN appear to no longer be applicable for the time being, but we continue to monitor developments.
Background
In our prior updates, we reported on significant developments affecting enforcement of the CTA arising out of federal district court proceedings in Texas Top Cop Shop, Inc., et al. v. Garland, et al. (Case No. 4:24-cv-00478 (E.D. Tex.)).
First, we reported on the December 3, 2024 district court decision granting a nationwide preliminary injunction which enjoined CTA enforcement and stayed BOI reporting requirements, and FinCEN’s guidance with respect to the injunction. Subsequently, we discussed the Fifth Circuit's December 23, 2024 temporary stay of the injunction, which reinstated CTA enforcement and led to revised reporting deadlines, starting from January 13, 2025, from FinCEN.
As of December 26, 2024, FinCEN’s most recently announced BOI reporting deadlines are paused due to the Fifth Circuit Court’s order vacating a stay.
Current Status of the CTA
The Fifth Circuit’s December 26 decision aims to maintain the “constitutional status quo” while a merits panel evaluates the substantive legal arguments surrounding the CTA’s validity. The appeal remains on an expedited schedule.
For the time being, reporting companies are not required to file BOI reports, though voluntary filings remain an option. As of this legal update, FinCEN has not commented on this latest Fifth Circuit determination. Given the fluid nature of this situation, companies should consult legal counsel and closely monitor further developments, including additional court decisions or guidance from FinCEN, which could impact compliance requirements and their timing. Entities subject to the CTA are encouraged to continue preparing their BOI reports to ensure readiness should the injunction be lifted.
[i]FinCEN’s earlier guidance on reporting obligations (which have as of December 26, 2024 been enjoined) is available in its entirety by accessing this link: https://www.fincen.gov/boi; a summary and an excerpt of FinCEN’s now enjoined guidance is here:
- “Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN (these companies would otherwise have been required to report by January 1, 2025);
- Reporting companies created or registered in the United States on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN;
- Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN;
- Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later and [r]eporting companies that are created or registered in the United States on or after January 1, 2025 have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.”
