Boy, oh, BOI!
Boy, oh, BOI, the Beneficial Ownership Information Reporting is enforceable AGAIN only for companies foreign to the USA. The drama remains & the penalties are ridiculous!
For domestic US companies – to file or not to file – that WAS the question.
No more. This is the world we live in.
FAs of March 2, 2025 FinCEN Removed Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons, Sets New Deadlines for Foreign Companies
Consistent with the U.S. Department of the Treasury’s announcement, the Financial Crimes Enforcement Network (FinCEN) is issuing an interim final rule that removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act.
In that interim final rule, FinCEN revises the definition of “reporting company” in its implementing regulations to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCEN also exempts entities previously known as “domestic reporting companies” from BOI reporting requirements.
Thus, through this interim final rule, all entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners will be exempt from the requirement to report BOI to FinCEN.
Foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN under new deadlines, detailed below.
These foreign entities, however, will not be required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.
For more information, see https://fincen.gov/news/news-releases/fincen-removes-beneficial-ownership-reporting-requirements-us-companies-and-us.
Existing foreign companies that must report their beneficial ownership information have at least an additional 30 days from the date of publication of the interim final rule unless specifically exempted.
It takes 5 minutes or less with the US Treasury here -> Beneficial Ownership Information Reporting
For more information, see press release and alert
Timeline of events: How Did we get here?
2/27/2025
FinCEN announced late Thursday 2/27/2025 that it will not issue fines or penalties or take any other enforcement actions against companies based on failing to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed.
2/18/2025
Following the February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336, the Financial Crimes Enforcement Network (FinCEN) has announced that beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act are back in effect, with a new deadline of March 21, 2025 for most companies.
FinCEN has also announced that it will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.
Notice: https://www.fincen.gov/sites/default/files/shared/FinCEN-BOI-Notice-Deadline-Extension-508FINAL.pdf
1/23/2025
As of 1/23/2025 the U.S. Supreme Court issued an order reviving the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) reporting requirements.
This order made the law enforceable until the 5th Circuit has issued a decision as to its constitutionality.
However, the Texas Public Policy Foundation (TPPF), representing the plaintiffs in a second case, Samantha Smith and Robert Means v. U.S. Department of the Treasury, asserts that its case is “based on different facts and arguments from the one in front of the Supreme Court.
Until this new appeal is heard, the US Treasury website will offer this guidance. “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.”
In my humble opinion, disclosing your state-issued driver’s license or passport information to the US Treasury is fully constitutional and will eventually become enforceable to combat money laundering, as originally intended when the requirement became law in the Corporate Transparency Act of 2021.
As importantly, the penalties for failing to file on time are outrageous and threatening.
the U.S. Supreme Court issued an order reviving the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) reporting requirements.
Meanwhile we await the Treasury Department’s appeal in the Samantha Smith and Robert Means v. U.S. Department of the Treasury case that is purportedly “based on different facts and arguments from In the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.).”
Reporting entities established before 2024 had been required to file an initial BOI report with the Financial Crimes Enforcement Network (FinCEN) by Jan. 13.
However, the U.S. Court of Appeals for the 5th Circuit issued a Dec. 26 stay pausing enforcement of reporting requirements while it considered the case.
The Supreme Court’s two-page order did not provide the reasons for reversing the 5th Circuit’s stay on CTA enforcement. Still, the high court said the act can be enforced until the 5th Circuit has decided its constitutionality.
The order also said the CTA would remain in force while the Supreme Court was considering whether to hear any appeals of the 5th Circuit’s ruling on the CTA.
FinCEN has yet to respond to the Supreme Court’s order and it is not clear when businesses will be required to file their initial BOI report with the agency. We will continue to monitor developments regarding BOI reporting and alert you to any changes or updates as they occur.
The 5th Circuit Court reversed their earlier stay, reinstating a preliminary injunction that prevented the Financial Crimes Enforcement Network (FinCEN) from enforcing the BOI filing requirement.
Following a recent court ruling on 12/26/2024, the Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA) have been temporarily halted AGAIN.
This ruling concludes that while the court considers the appeal, the injunction stands, and BOI reporting is not required until a court decision is reached, providing a clear status update.
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.
Accordingly, as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. v. Garland is in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN.
On 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 the case of Texas Top Cop Shop, Inc. v. Garland, pending the outcome of the Department of the Treasury’s ongoing appeal of the district court’s order.
FinCEN immediately issued an alert notifying the public of this ruling, and recognizing that reporting companies may have needed additional time to comply with beneficial ownership reporting requirements, FinCEN extended reporting deadlines.On Tuesday, 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.
Texas Top Cop Shop is only one of several cases that have challenged the Corporate Transparency Act (CTA) pending before courts around the country.
Several district courts have denied requests to enjoin the CTA, ruling in favor of the Department of the Treasury.
The government continues to believe—consistent with the conclusions of the U.S. District Courts for the Eastern District of Virginia and the District of Oregon—that the CTA is constitutional.
For that reason, the Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024 and separately sought of stay of the injunction pending that appeal.
For more on Beneficial Ownership Information Reporting (BOIR) contact me today.
