“BOI Lifts Injunction: New Reporting Deadline Set for January 1, 2025!”

The original deadline for businesses to submit beneficial ownership information (BOI) reports was reinstated on Monday.

The Fifth Circuit Court of Appeals approved the Department of Justice (DOJ) request to lift an injunction established by a district court ruling on Dec. 3, which the DOJ subsequently contested.

“Unless informed otherwise, the BOI filing deadline stands at Jan. 1, 2025,” stated Melanie Lauridsen, the AICPA’s vice president–Tax Policy & Advocacy, in a post on LinkedIn.

The injunction was instated in Texas Top Cop Shop, Inc. v. Garland, No. 4:24-CV-478 (E.D. Texas 12/3/24). According to the injunction, the Corporate Transparency Act (CTA) and the BOI reporting regulations could not be enforced, meaning reporting companies were not obliged to adhere to the Jan. 1, 2025, BOI reporting deadline until further instructions were issued by the court.

The DOJ, having filed a notice of appeal two days later, requested the Fifth Circuit to decide on its motion for a stay by Dec. 27 “to ensure that regulated entities are made aware of their obligation to comply before January 1, 2025.”

The case is still in litigation. Yet, in its ruling, the Fifth Circuit indicated that “the government has demonstrated a substantial likelihood of succeeding on the merits in defending the constitutionality of the CTA.”

The AICPA, along with state CPA organizations, had penned multiple letters to Congress and the Financial Crimes Enforcement Network (FinCEN), which oversees the CTA, advocating for a postponement in the reporting deadline. A proposed spending bill introduced in the House of Representatives last week suggested a one-year delay in the BOI reporting requirements. However, the version of the bill that Congress approved late Friday, thus averting a government shutdown, did not encompass any BOI deadline adjustments.

The AICPA is consistently updating its BOI reporting resource center.

FinCEN issued a notification following the district court’s injunction stating that “reporting companies are not currently mandated to file their beneficial ownership information with FinCEN and will not face liability for failing to do so while the preliminary injunction is active. However, reporting companies may choose to voluntarily submit beneficial ownership information reports.”

Previously, the DOJ contested an Alabama district court’s decision in the Eleventh Circuit declaring the CTA unconstitutional. Nonetheless, in that instance, the court clarified that the order applied solely to the plaintiffs named in that case. The Eleventh Circuit heard oral arguments for the case in September.

In its notification, FinCEN highlighted that the Texas case is among several ongoing cases where plaintiffs have challenged the CTA. District courts in Virginia, in Community Associations Institute v. Yellen, No. 1:24-cv-1597 (E.D. Va. 9/10/24), and in Oregon, in Firestone v. Yellen, No. 3:2024cv01034 (D. Ore. 9/20/24), have denied applications to suspend the CTA, determining that the plaintiffs were unlikely to prevail in their constitutional claims, according to FinCEN.

As per the notification, in line with the conclusions of those district courts, the government maintains its belief that the CTA is constitutional.

Under the CTA, P.L. 116-283, which Congress enacted in 2021 as an anti-money-laundering measure, reporting companies are required to disclose the identity and information regarding beneficial owners of the entities. For new entities formed after Jan. 1, 2024, reporting companies must also reveal the identity of “applicants” — defined as any individual who submits an application to establish a corporation, limited liability company, or similar entity.

— To provide feedback on this article or to propose an idea for another article, contact Neil Amato at [email protected].