Important Update on Beneficial Ownership Information (BOI) Reporting

Information provided below came from Sponsel CPA Group in an email newsletter on December 12, 2024.

We wanted to bring your attention to a significant update regarding the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) reporting requirements. 
 
What Happened?
On Tuesday, December 3, 2024, a federal district court in Texas issued a nationwide preliminary injunction that: 

• Enjoins enforcement of the CTA and its regulations related to BOI reporting requirements. 
• Stays all deadlines for compliance, including the January 1, 2025 deadline for reporting companies to submit their initial BOI report. 

 
Following this ruling, the Department of Justice, representing the Department of the Treasury, filed an appeal on December 5, 2024.
 
What This Means for Reporting Companies
As long as the preliminary injunction remains in effect: 

• Reporting companies are NOT required to report BOI to the Financial Crimes Enforcement Network (FinCEN). 
• Companies will NOT face liability for failing to report their BOI. 

 
However, FinCEN has clarified that companies may still voluntarily submit BOI reports if they choose to do so. 
 
What Lies Ahead?
The future of the CTA and its reporting requirements remains uncertain. The Texas district court’s decision is just one of several ongoing legal challenges. There are conflicting rulings from other federal district courts, and three related cases are currently under appeal. Because of this, it is crucial to stay updated on developments, as the situation could evolve rapidly.
 
Next Steps
We are continuously monitoring these developments and will advise clients as needed. Be prepared that the requirement to comply in the future if the CTA is ultimately upheld is a possibility. For further information, please visit the FinCEN Beneficial Ownership Information Reporting and the AICPA beneficial ownership information (BOI) reporting pages.
 
If you would like more detailed information on the legal case, please refer to Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.) injunction.