Yet another update to the required BOI reporting with FinCEN!

Updated January 6th, 2025 - In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, with a few exemptions, are once again required to file beneficial ownership information with FinCEN.

Because the BOI reporting requirement seems to be changing, almost weekly, due to court challenges, WSMTA suggests that you sign up for alerts directly from FinCEN.

Please follow this link and you can see the recent Alerts as well as sign up to receive alerts.

https://fincen.gov/boi

This season, small business owners can breathe a sigh of relief (and maybe keep a little more cash in their pockets) thanks to a new federal filing update. Reporting companies are currently not required to file Beneficial Ownership Information (BOI) with FinCEN, nor are they subject to liability for failing to do so while this order remains in effect.

On December 3rd, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against enforcing the Corporate Transparency Act (CTA). This ruling questioned the constitutionality of the CTA and highlighted its potential impact on small businesses. The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024. 

Why Was FinCEN Started in the First Place?

The Financial Crimes Enforcement Network (FinCEN) was created in 1990 as part of the U.S. Department of the Treasury. Its goal? To act as a bridge between law enforcement, financial institutions, and regulatory agencies. By gathering and analyzing financial information, FinCEN helps detect and prevent financial crimes like money laundering and terrorist financing, both within the U.S. and globally.

What Does the CTA Require of Businesses?

Under the Corporate Transparency Act (CTA), certain businesses—mainly corporations, limited liability companies (LLCs), and similar entities registered to operate in the U.S.—Were required to report Beneficial Ownership Information (BOI) to FinCEN. This meant disclosing details about individuals who own or control the company.

While the CTA was designed to increase transparency and combat financial crimes, it has raised concerns, especially for small businesses. Many argued that the requirement imposed unnecessary administrative burdens and steep penalties for non-compliance, creating more stress for smaller entities trying to stay afloat. To be clear, there is no fee associated with filing unless a business chooses to hire someone to do the filing for them.

Temporary Relief for Small Businesses

Recently, a court issued an injunction that pauses the enforcement of these reporting requirements. This decision offers temporary relief, allowing small businesses to focus on their day-to-day operations without the added pressure of complying with the BOI filing rules—for now.

The pause gives businesses a breather, but it’s essential to stay updated on further developments, as the situation may change. Although it is not required businesses can voluntarily submit their Beneficial Ownership Information reports. 

What does this mean?

Therefore, the CTA, 31 U.S.C. § 5336 is hereby enjoined. Enforcement of the Reporting Rule, 31 C.F.R. 1010.380 is also hereby enjoined, and the compliance deadline is stayed under § 705 of the APA. Neither may be enforced and reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further order of the Court.

To read the statement: https://www.fincen.gov/boi

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