In this fifth installment of PilieroMazza’s series on the reporting requirements associated with the Corporate Transparency Act (CTA) (see links to Part 1, Part 2, Part 3, and Part 4), we discuss the nationwide preliminary injunction halting enforcement of the CTA. While reporting companies formed prior to January 1, 2024, need not comply with the CTA’s January 1, 2025, Beneficial Ownership Information Report (BOIR) filing deadline, and reporting companies formed in 2024 similarly need not comply with the CTA’s ninety (90) day BOIR filing deadline, they may want to consider voluntary reporting.
In response to the preliminary injunction, the U.S. Department of Justice (DOJ) filed a Notice of Appeal with the U.S. Court of Appeals for the Fifth Circuit on December 5, 2024. The Financial Crimes Enforcement Network (FinCEN) also issued an alert with the following guidance:
FinCEN will comply with the order issued by the U.S. District Court for the Eastern District of Texas for as long as it remains in effect. Therefore, reporting companies are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect. Nevertheless, reporting companies may continue to voluntarily submit beneficial ownership information reports.
This confirms that FinCEN is complying with the injunction and will not require any BOIR filings until the injunction is stayed or overturned by the Fifth Circuit.
However, as FinCEN notes, companies may continue to voluntarily submit BOIRs. Because of the pending appeal, PilieroMazza advises reporting companies to continue gathering the necessary information for their BOIR submission to avoid scrambling to compile it on short notice.
If you need guidance concerning compliance with the CTA, PilieroMazza attorneys are here to assist you. Please contact Meghan Leemon, Abby Baker, Cole Fox, or another member of the Firm’s Government Contracts or Business & Transactions practice groups.
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Looking for practical insights on gaining a competitive advantage through a deeper understanding of the government’s compliance requirements? Check out PilieroMazza’s podcasts “GovCon Live!” and “Clocking in with PilieroMazza.”
