Latest Update (December 23, 2024):
The U.S. Court of Appeals for the Fifth Circuit has lifted the injunction that paused enforcement of the Corporate Transparency Act (CTA). As a result, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has extended the deadline for businesses to file Beneficial Ownership Information (BOI) reports. Reporting companies created or registered prior to January 1, 2024, now have until January 13, 2025, to comply. Additional deadlines apply for companies registered between December 3, 2024, and December 23, 2024, and disaster relief provisions may provide further extensions. For more details, please refer to Accounting Today.
On December 3, 2024, a federal court in Texas ruled that the Corporate Transparency Act (CTA), which requires millions of companies to file Beneficial Ownership Information (BOI) reports, is unconstitutional. This decision temporarily halts the federal government from enforcing the CTA nationwide, creating a significant moment of uncertainty for businesses.
Key Details About the Ruling
Immediate Pause on Enforcement
The court determined that requiring businesses to meet the January 1, 2025, BOI filing deadline could cause irreparable harm. As a result, the government is temporarily barred from enforcing the CTA’s requirements.
Appeals Are Likely
The ruling is expected to face appeals, which could extend the legal battle for a year or more. If overturned, businesses may still need to comply with BOI reporting requirements in the future.
Implications for Businesses
For businesses that have already submitted BOI reports, there is no immediate impact. However, those that have not filed are left navigating a landscape of legal uncertainty.
What Should Business Owners Do?
Consult Legal Counsel
Speak with your attorney to assess your specific situation. They can guide you on whether to submit BOI information now or wait for further legal developments.
Stay Informed
As the legal landscape evolves, including potential changes under the incoming administration, staying updated on the situation is critical to remaining prepared.
The Bottom Line
While this ruling provides temporary relief for businesses, the future of the BOI filing requirement remains uncertain. Consulting with legal professionals and closely monitoring developments will ensure your business is positioned to adapt to any eventual outcomes.
