If you’ve been following the Corporate Transparency Act (CTA) saga, earlier this month a federal court in Texas issued a nationwide injunction halting enforcement of the legislation requiring submission of Beneficial Ownership Information (BOI) reports for businesses. CTA opponents heralded the development as the death of the Wicked Witch. Well, just when it seemed safe to click your heels together and enjoy the holidays, the Fifth Circuit Court of Appeals sent a flying monkey straight into your plans: the nationwide injunction is no more, and the BOI reporting rules are back in full force.
In the last 20 days, there were attempts to salvage the CTA on a few fronts. The Fifth Circuit granted the request of the U.S. Attorney General for expedited briefs, cutting down the usual timeline for the submission of the arguments in support of its appeal. While these briefs were pending, several legislators attempted to alleviate potential last minute filing concerns by extending the filing deadline for existing businesses from January 1, 2025 to January 1, 2026 in the same continuing resolution that prevented a government shutdown. Although the year extension was removed from the resolution last minute before it passed on December 20th, the Fifth Circuit flew in a few days later and found that it is likely that the government will succeed in proving that the CTA does not violate certain constitutional protections or exceed Congress’ authority, and the injunction should therefore no longer stand.
Luckily, the Financial Crimes Enforcement Network (FinCEN) realized that this sudden development a mere 8 days prior to the filing deadline would be akin to dropping a house on the morale of businesses during an already stressful time of year and potentially crashing its own reporting system. FinCEN issued guidance last night adjusting the filing deadlines for businesses formed prior to January 1, 2024, and for those formed in September 2024 that would have been required to file between December 3rd and 23rd, the period of time in which the injunction was in place. Businesses formed in October through December 2024 still have a 90-day filing window. Businesses formed on or after January 1, 2025 still need to file their BOI reports within 30 days of formation. Businesses that have already filed must keep updating their information whenever beneficial ownership changes.
Date of Formation | Old Filing Deadline | New Filing Deadline |
Prior to January 1, 2024 | December 31, 2024 | January 13, 2025 |
September 3-23, 2024 | December 3-23, 2024 | January 13, 2025 |
October through December 2024 | 90 days from the date of formation | 90 days from the date of formation |
January 1, 2025 or later | 30 days from the date of formation | 30 days from the date of formation |
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What Happens Next:
File your BOI report. While the extension provides a much needed reprieve for those businesses that have yet to start traveling the yellow brick road to compliance, the new deadline will be here just as quickly. A reminder that FinCEN is threatening fines and penalties for failure to file.
As we cautioned before, this is a continuously developing matter. There is a possibility that there may yet be more twists and turns to this tale in January. JH Legal will continue to monitor this issue.
Don’t let this wicked turn of events melt your resolve. JH Legal is here to help you navigate the requirements and prepare your filings. Because when it comes to corporate compliance, there’s no place like JH Legal.
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