Reporting back on!

We recently issued a newsletter explaining The Financial Crimes Enforcement Network (“FinCEN”) issuance of The Reporting Rule, implementing Section 6403 of the Corporate Transparency Act (“CTA”) and requiring certain entities to file beneficial ownership information (BOI) before January 1, 2025. There have been significant developments since our newsletter which affect that reporting deadline.

First, in Texas Top Cop Shop v Garland et al., 4:24-cv-00478 (Dec. 3, 2024) the Eastern District of Texas granted a nationwide injunction preventing FinCEN from enforcing the Corporate Transparency Act. This came at a time when several other courts were considering similar injunctions, placing the future of The Reporting Rule squarely in doubt. For its part, FinCen released an explanatory alert insisting the CTA is constitutional, but nonetheless conceded companies will not be subject to liability for failing to comply in the wake of the Texas Top Cop Shop injunction.

Now, on December 23, 2024, the Fifth Circuit Court lifted the injunction, allowing the FinCEN to enforce BOI reporting. With that, FinCEN extended the reporting deadlines as follows:

• Companies created before Jan. 1, 2024, have until Jan. 13, 2025, to file.
• Companies created between Sept. 4, 2024, and Dec. 23, 2024, have until Jan. 13, 2025, to file.
• Companies created between Dec. 3, 2024, and Dec. 23, 2024, have an additional 21 days from their original deadline.
• Companies created on or after Jan. 1, 2025, have 30 days to file after receiving notice.
• Note: companies that had extended deadlines due to disaster relief (hurricanes) will continue with those set deadlines. More information on these deadlines can be found here under the 2nd alert.

We suggest clients consult their tax advisor as soon as possible to make sure you are on track to have these completed and in compliance with requirements.  More information can be found on the FinCEN BOI website here.