The future of the Corporate Transparency Act (CTA) remains uncertain amid ongoing legal proceedings, summarized below. Reporting companies currently have a choice of whether to file or not to file the beneficial ownership information (BOI) reports mandated by the CTA with the US Financial Crimes Enforcement Network (FinCEN). FinCEN continues to accept voluntary filings.
Given the uncertainty, the potential for short filing deadlines, and the CTA’s harsh penalties, Odin, Feldman & Pittleman, PC (OFP) urges reporting companies to be in a position to file BOI reports quickly should circumstances change.
Here is a chronological summary of the legal proceedings:
- December 3, 2024 – the District Court for the Eastern District of Texas issued a nationwide injunction. Reporting companies are not required to file BOI reports.
- December 23, 2024 – a 3-judge motions panel on the Court of Appeals for the Fifth Circuit issued an order lifting the preliminary nationwide injunction. Reporting companies are required to file BOI reports.
- December 26, 2024 – a 3-judge merits panel on the Court of Appeals reimposed the nationwide injunction and issued a schedule for considering the constitutionality of the CTA case, with oral arguments scheduled for March 25, 2025. A decision would be issued after that date. Pending a decision, reporting companies are not required to file BOI reports.
- December 31, 2024 – The federal government filed an Application for a Stay of the Injunction requesting the Supreme Court to stay the nationwide injunction pending a ruling on the constitutionality of the CTA. The application does not affect the status of the injunction, which remains intact. Reporting companies still are not required to file BOI reports.
Looking ahead
If the Supreme Court grants the federal government’s application, then reporting companies once again would be required to file BOI reports, perhaps quickly. However, the Supreme Court is not obliged to answer the application on any particular timeline, or at all. As a final note, Congress is deliberating on possible changes to the CTA, and it remains unclear whether the incoming Trump administration will continue to defend the constitutionality of the CTA.
If you would like to file BOI reports on a voluntary basis and require assistance determining what should be included in the reports, then please contact your OFP lawyer.
If you would like to file BOI reports on a voluntary basis and require assistance filing, then please reach out to one of the third-party service providers whose contact information was provided in our first letter about the CTA. One third-party service provider that we have used is FinCEN Report Company. If you would like to use FinCEN Report Company, please contact either Jonathan Wilson, [email protected], or Jay Morris, [email protected].