No BOI Reporting is Currently Required (January 2025)
Beneficial Ownership Information, or BOI, became a new acronym to business owners in 2024. As a part of the Corporate Transparency Act, nearly all businesses (or “reporting companies”) were required to report BOI to FinCEN by January 1st of this year or face a heavy penalty. However, as the deadline approached, numerous legal challenges forced an injunction putting reporting to a halt.
Below, we’ll share a brief timeline of BOI’s legal challenges, including the back-and-forth injunction that halted, then reinstated, then halted reporting. But first, business owners should know the current status. According to the FinCEN website:
“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. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
What does it mean for business owners?
If you’ve already reported, you’re fine
If you haven’t reported, you currently do not have to and will not currently face penalty
If you’d like to report, you may do so on a voluntary basis
Timeline of Events and Legal Challenges for BOI Reporting:
The current injunction comes from Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), a case that challenged the legality of BOI Reporting. It is one of several cases that have challenged the Corporate Transparency Act (CTA) pending before courts around the country.
The timeline below is summarized from the FinCEN website.
December 3, 2024: In the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), the U.S. District Court for the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction. The Department of Justice, on behalf of the Department of the Treasury (Treasury), filed a Notice of Appeal on December 5, 2024 and separately sought a stay of the injunction pending that appeal.
December 23, 2024: A panel of the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction entered in Texas Top Cop Shop, Inc., pending the outcome of Treasury’s ongoing appeal of the district court’s order. Treasury issued an alert to the public and extended reporting deadlines.
However, on December 26, 2024, a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the Court’s December 23, 2024 order granting a stay of the preliminary injunction. On December 31, 2024, the Department of Justice, on behalf of Treasury, sought a stay of the injunction pending the ongoing appeal from the Supreme Court of the United States.
As of December 26, 2024: The injunction issued by the district court in Texas Top Cop Shop, Inc. is once again in effect. As a result, reporting companies are not currently required to file beneficial ownership information with FinCEN. Reporting companies may continue to voluntarily submit beneficial ownership information reports.
What’s Next?
Business owners should remain informed of the status of BOI reporting and its legal challenges. Our team will continue to update on developments, including on whether or not reporting should resume. For more information about BOI, see our previous article on Beneficial Ownership Reporting FAQs. Or, reach out to our team for guidance.
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