On February 18, 2025, the U.S. District Court for the Eastern District of Texas lifted the nationwide injunction issued 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 (E.D. Tex.).

The Smith injunction blocked the enforcement of the Corporate Transparency Act’s (CTA) requirement that all Reporting Companies report Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). In Response to the injunction being lifted, FinCEN extended the filing deadline for BOI Reports to March 21, 2025.

However, on February 27^th FinCEN extended the March 21, 2025 deadline, announcing that it will not impose fines or penalties against companies that fail to file or update their BOI Report until the interim final rule becomes effective.

Since FinCEN first announced the CTA’s BOI Rule there has been concern that the Rule’s reporting requirements are overreaching and unconstitutional. In light of these concerns FinCEN has stated that it will seek out comments from the public on how it may revise reporting requirements.

 

Related Post: FinCEN Releases Corporate Transparency Act 2025 Update

 

No later than March 21, 2025, FinCEN expects to issue an interim final rule that will extend deadlines and offer clarity on updated reporting requirements.

FinCEN has stated that it aims to issue a final rule that will incorporate the public’s feedback to “minimize the burden on small businesses” while still ensuring the reports are “highly useful to important national security, intelligence, and law enforcement activities.”[i]

What Does This Mean for Businesses?

BOI Reports remain voluntary for now given that no fines or penalties will be issued for failing to file. Reporting Companies may opt to file or choose to wait until further guidance is issued.

The ongoing proceedings and the back and forth highlight the intricate interplay between FinCEN’s regulatory authority and the court’s judicial decisions. The on-again off-again nature of BOI reporting requirements is enough to give anyone whiplash and has understandably left many confused as to what their responsibilities are under the CTA.

While the future of the CTA and its BOI reporting requirements remain unknown, Reporting Companies should continue to prepare to file at any time by taking the following steps:

1. Check if you are a Reporting Company or a Trust that owns a Reporting Company. Not every company is subject to the BOI Rule, however most smaller entities or businesses, like Limited Liability Companies (LLCs), Partnerships, closely held Corporations, and even some Trusts are subject to the CTA’s reporting requirements.

                              Related Post: Corporate Transparency Act: Key Insights for Trust Trustees

2. Identify who the Beneficial Owners are. A Beneficial Owner is any individual who owns at least 25% of the ownership interests in or exercises substantial control over a Reporting Company.
3. Gather the necessary information about the Beneficial Owner(s). The CTA requires Reporting Companies to provide any Beneficial Owner’s name, date of birth, residential address, and unique identifying number from either a passport, U.S. driver’s license, the name of the issuing State of the passport or U.S. driver’s license, and a picture of the passport or U.S. driver’s license.
4. Prepare the Report for Filing. If the Supreme Court lifts the injunction and the BOI Rule goes into effect, companies will want to promptly file as to avoid potential penalty.

Filing can be done via the FINCEN website. For more information, please click here https://boiefiling.fincen.gov/

If you have questions or concerns regarding and navigating the intricacies of the CTA’s reporting requirements, the experienced estate planning attorneys at Reed Wilson Case can help you!

[i] FinCEN Not Issuing Fines or Penalties in Connection with Beneficial Ownership Information Reporting Deadlines | FinCEN.gov

Disclaimer: The information provided in this article does not, and is not intended to, constitute legal advice and is for general informational purposes only.

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