We have an update for you about the FinCEN Beneficial Ownership Information Reporting that was required as part of the Corporate Transparency act. Many of you have already taken care of this filing, but there are lots of companies that have not. As a reminder, the new non-income tax filing requires non-exempt entities to report the beneficial owners of the entity.
What is the new development?
On December 3, 2024, a federal judge in Texas issued a ruling that temporarily suspends enforcement of the Corporate Transparency Act nationally and the FinCEN beneficial ownership reporting. It is not a repeal but a temporary stay of enforcement. It is expected that an appeal will be filed, and the stay could potentially be lifted before the end of the year. We would have to wait until the end of proceedings for the final ruling. There have been other similar federal cases that have not resulted in a permanent suspension of the Corporate Transparency Act. While the outcome of any appeal is uncertain, the Corporate Transparency Act’s purpose as a national defense tool and its resilience in previous legal challenges suggest that a judicial repeal is unlikely.
What should you do?
You can 1) continue with filing your report(s) for your non-exempt entities or 2) wait for a resolution to this injunction. Should this issue extend into January, it remains to be seen whether FinCEN will proactively adjust the compliance deadline. As it stands currently, FinCEN cannot enforce penalties. Because of the uncertainty and the proximity to the 12/31/24 deadline for companies created before 12/31/23, we recommend that you continue to comply with the law as it stands. You should consult your legal representation if you want to wait for a decision by the courts before filing the report.
You can file this on your own for free, or we can help you file it. The cost is $500 for the first entity and $250 additional entities. If you want us to do this, we need to know as soon as possible. We provided some resources below or feel free to reach out if you have any questions.
Resources:
The report can be filed at this link. https://boiefiling.fincen.gov/
Five-Minute Demo: How to File a Beneficial Ownership Information (BOI) Report https://www.youtube.com/watch?v=GydCvfbKxPw
Guide:
https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf