A recent ruling by the U.S. District Court for the Eastern District of Texas in Smith v. US Department of the Treasury reinstated the beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA). As a result, reporting companies once again became required to file BOI reports with the Financial Crimes Enforcement Network (FinCEN).
In an initial response to this ruling, FinCEN extended the deadline for filing BOI reports for the vast majority of reporting companies to March 21, 2025.
Subsequently, FinCEN announced that it will not issue any fines or penalties or take any other enforcement action against reporting companies based on a failure to file BOI reports by the current deadlines. FinCEN further announced that it intends to wait to enforce the CTA until new reporting deadlines, to be contained in a forthcoming FinCEN interim final rule, have passed. FinCEN stated that the interim final rule will be issued no later than March 21, 2025; however, it did not estimate when the new reporting deadlines would occur.
Then, on March 2, 2025, the Treasury Department announced that it will not enforce ANY penalties or fines associated with the CTA BOI reporting requirements against U.S. citizens, domestic reporting companies, or their beneficial owners, even after the interim final rule takes effect.
The Treasury Department further announced that it will be issuing a proposed rulemaking that will narrow the scope of the CTA to apply only to foreign reporting companies.
Half a dozen lawsuits challenging the constitutionality of the CTA are working their way through the court system, the most prominent of which, Texas Cop Shop v. Bondi, is set to be argued in the Fifth Circuit on March 25, 2025.
In addition, there are two bills pending in Congress that may affect the CTA: (1) the Repealing Big Brother Overreach Act, which, if enacted, would repeal the CTA; and (2) the Protect Small Businesses from Excessive Paperwork Act of 2025, which, if enacted, would extend the deadline for filing BOI reports to January 1, 2026.
While reporting companies should continue to monitor CTA developments, given the Treasury Department’s announcement and the current legal and judicial landscape, it would be prudent to wait and see what unfolds rather than to immediately file BOI reports.
However, FinCEN continues to accept BOI reports on a voluntary basis. If you would like to prepare or file BOI reports and require assistance determining what should be included in the reports, or have questions regarding the CTA’s status, please contact your OFP lawyer.
Read our prior notices regarding the CTA: