On January 2, we wrote about the on-again, off-again decisions being made regarding the filing of beneficial ownership information (BOI) with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
In that article, we noted that on December 30, 2024, the Justice Department asked the U.S. Supreme Court to weigh in on lower court injunctions against enforcement by the government on beneficial ownership reporting filings.
Supreme Court Ruling and Existing Injunction
Well, on January 23, the Supreme Court granted the government’s motion and lifted a nationwide injunction issued by a district court in Texas Top Cop Shop, Inc. v. Garland, a move that in and of itself would have allowed enforcement of the law requiring filings to move forward. Under the law, many preexisting 1/1/2024 businesses were required to provide ownership information with FinCEN by December 31, 2024 (later extended to January 13, 2025).
However, a separate nationwide injunction against enforcement of Corporate Transparency Act (CTA) filing remains in place. Samantha Smith and Robert Means v. U.S. Department of the Treasury is based on different facts and arguments from the one just ruled on by the Supreme Court, so despite the Court’s ruling in Texas Top Cop Shop, reporting companies still are not currently required to file beneficial ownership information with FinCEN.
FinCEN’s Response
This result was confirmed by FinCEN on January 24 when it announced that, “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force.”
Penalties for Non-Compliance (If Enforcement Resumes)
Note that willful violations of the law, if enforcement is allowed to go forward, can be substantial, punishable by civil and criminal fines and penalties of $591 a day, up to $10,000, and two years in prison with similarly serious penalties for unauthorized disclosure.
Uncertainty and Future of the CTA
The recent judicial decisions leave reporting companies uncertain about their response. FinCEN notes that reporting companies may continue to voluntarily submit beneficial ownership information reports. Supporters of the CTA cite national security needs and the Trump administration’s position on enforcement is not yet known, though Sen. Tommy Tuberville (R-Ala.) and Rep. Warren Davidson (R-Ohio) introduced companion bills in their respective chambers (S. 100/H.R. 425) on January 15 to repeal the CTA.
Recommendations for Reporting Companies
In the wake of the above, reporting companies may just want to stay their course until the waters calm and final guidance is provided, but they should continue to monitor the proceedings. A final decision could result in the need for filings with possibly only a short extension period. If companies have not already taken steps to gather the necessary information required to be reported, they may want to reconsider so they could act quickly if the law is upheld.
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