TYLER, Texas — A new court ruling has put the beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) back in effect.
The decision was made on Feb. 18 by the U.S. District Court for the Eastern District of Texas in the case of Smith, et al. v. U.S. Department of the Treasury, et al. However, the U.S. Department of the Treasury says it recognizes that reporting companies may need additional time to comply with their BOI reporting obligations, and has set the deadline for reporting for March 21.
In its notice regarding the decision and new deadlines, the Financial Crimes Enforcement Network (FinCEN) says it will “assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce burdens for lower-risk entities, including many U.S. small businesses.”
The agency went on to say that “for the vast majority of reporting companies, the new deadline to file an initial, updated and/or corrected BOI report is now March 21, 2025. FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.”
It also says that reporting companies that were previously given a deadline later than March 21 must file their initial BOI report by that later deadline.
“For example, if a company’s reporting deadline is in April 2025 because it qualifies for certain disaster relief extensions,” the release states, “it should follow the April deadline, not the March deadline.”
The Battles Over BOI
This is the latest turn of events in the ongoing legal battles that have surrounded BOI reporting. The CTA, passed in January 2021, requires most companies, including dry cleaners, to file ownership information with FinCEN.
The BOI reports would be mandatory for anyone exercising substantial control or owning at least 25% of a reporting company. The law aims to prevent illicit activities such as money laundering and drug trafficking through shell companies.
On Jan. 7, the U.S. District Court for the Eastern District of Texas issued an order staying FinCEN’s regulations implementing the BOI reporting requirements. On Feb. 5, the U.S. Department of Justice filed a notice of appeal of the District Court’s order and requested a stay during the appeal.
On Feb. 18, the Court agreed to stay its Jan. 7 order until the appeal is completed. Given this decision, FinCEN states that the regulations implementing the BOI reporting requirements of the CTA are no longer stayed. “Thus, subject to any applicable court orders, BOI reporting is now mandatory, but FinCEN is providing additional time for companies to report,” the release states.
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