UPDATE: On Dec. 26, 2024, the 5th Circuit Court reversed an earlier stay, reinstating a preliminary injunction that prevents the Financial Crimes Enforcement Network (FinCEN) from enforcing the BOI filing requirements:
“However, in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments, that part of the motions-panel order granting the Government’s motion to stay the district court’s preliminary injunction enjoining enforcement of the CTA and the Reporting Rule is VACATED”
This ruling concludes that, while the court considers the appeal, the injunction stands, and BOI reporting is not required until a court decision is reached, providing a clear status update.
We’ll continue to provide updates on this evolving issue.
Dec. 23, 2024: The 5th Circuit Court of Appeals has granted the government’s emergency motion to stay a Texas district court’s nationwide injunction against the Corporate Transparency Act (CTA). CTA requires nonexempt companies to report their beneficial owners. Before the Texas court’s injunction, specified businesses formed prior to 2024 were required to file their initial beneficial ownership information (BOI) report with the Financial Crimes Enforcement Network (FinCEN) by Jan. 1, 2025, and new businesses were required to file within 30 days.
The stay means the CTA is now in effect. The court found that the government is likely to succeed on appeal, that leaving the injunction in place could cause significant harm, and that the public interest in preventing financial crimes outweighs any harm to the plaintiffs. The case will proceed quickly to the next available oral argument panel. FinCEN has yet to issue a response to the 5th Circuit’s order.
In its budget discussions of last week, Congress did not extend the BOI compliance deadline for existing businesses to Jan. 1, 2026, so the original deadline of Jan. 1, 2025, remains in place. As a result, the 5th Circuit’s decision has immediate implications for affected businesses.
As we previously advised, it is best to file these reports as soon as possible given the few remaining days left before the Jan. 1, 2025, due date. If you need education on this topic, we have an on-demand webinar available: Corporate Transparency Act: Reporting the BOI with FinCEN. This webinar is free for Premium level members. Professional level members can use code FREECPE at checkout to redeem a 1 or 2 CPE webinar per membership period.
We will continue to monitor developments and alert you to any changes or updates as they occur.
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Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.