UPDATE: DECEMBER 28, 2024: In the latest twist of the FinCEN Beneficial Owners Information (BOI) report, the new deadline for FinCEN’s BOI Report is on hold again.
On Saturday, December 28, The United States Fifth Circuit Court of Appeals reimposed the injunction imposed by a U.S. District Court in Texas on December 23, 2024. As a result, January 13, 2025, is no longer the new deadline for FinCEN’s BOI Report for the vast majority of associated corporate and business entities.
It’s been a long road. The Beneficial Ownership Interest (BOI) report was established by the Corporate Transparency Act (CTA), signed into law on January 1, 2021.
BOI reporting requirements were temporarily suspended by an injunction in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., Case No. 4:24-cv-478, in which the District Court found that Congress had exceeded its authority and the CTA was unconstitutional.
The Fifth Circuit’s three-judge panel ruled on December 26th that “the government has made a strong showing that it is likely to succeed on the merits in defending CTA’s constitutionality”. It removed the injunction imposed by the lower Court. That injunction was placed back into effect on Saturday, December 28, and the entire U.S. business community is waiting to see what happens next as a result of the delay between the original decision in Texas Top Cop Shop, Inc., et al. v. Garland, et al., and the rulings of the Fifth Circuit Court of Appeals.
The Financial Crimes Network (FinCEN) had immediately issued a new “Alert” to update the reporting deadlines associated with the reporting deadline for the Beneficial Ownership Information form. The New deadline for FinCEN’s BOI Report would have been January 13, 2025, for most “reporting companies,” with few exceptions.
The largest group of entities affected by this decision are those reporting companies formed before January 1, 2024. The original January 1, 2025, deadline was extended to January 13, 2025, for those entities to complete and submit their BOI report. The January 13, 2025, deadline would have also applied to qualifying entities formed or registered on or after September 4, 2024 (who would have been required to file the BOI between the date of the injunction, December 3, 2024, and the date of the decision of the U.S. Fifth Circuit Court of Appeals, December 23, 2024.
Unfortunately, there are many entities within areas designated for disaster relief due to hurricanes Milton, Helene, Debby, Beryl, and Francine. These companies no longer have to worry about getting their filings in on January 13, 2025, or FinCEN’s instruction to “abide by whichever deadline falls later,” in their latest BOI Alert. All bets are off for now. The question, again, becomes: for how long?
The reimposition of the original injunction places an immediate stop on the recently established deadline for FinCEN’s BOI Report of January 13, 2025.
What could possibly happen next? We will watch the Courts closely and advise with any updates. However, the ownership interests of many qualifying small businesses and corporations may be surprised to learn of the Fifth Circuit’s reversal and yet another reprieve from the date to file a BOI report with FinCEN.
If you hold a beneficial interest in a qualifying entity or company and are not one of the almost 8 million businesses that have already complied with the BOI reporting requirements, it is in your interest to pay close attention to this space. Just as the 5th Circuit Court of Appeals reversed itself in just two days, we may receive notice to come into compliance with the original BOI report requirements at any point in the future.
We invite you to learn more about the integrated tax, legal, accounting and business consulting services of Allen Barron and contact us or call today to schedule a free consultation at 866-631-3470.