BOI Reporting Requirements Temporarily Suspended
Grimbleby Coleman’s Tax team has an update for business owners about a recent development regarding the Corporate Transparency Act (CTA). On December 3, 2024, a federal district court in Texas issued a nationwide preliminary injunction against the enforcement of the CTA’s beneficial ownership reporting requirements. This decision, in the case of Texas Top Cop Shop v. Garland (Case No. 4:24-CV-478), found that Congress exceeded its authority, infringing on states’ rights to regulate businesses.
As a result, the Financial Crimes Enforcement Network (FinCEN) is prohibited from enforcing the January 1, 2025, reporting deadline for all reporting companies. While this ruling is likely to be appealed, for now, you are not required to file beneficial ownership information reports with FinCEN.
Our Tax team will keep you updated on any further developments and filing requirements in the future, as the Court’s decision will likely not be the final word on the CTA’s enforceability. To begin, the Court entered only a preliminary injunction, which it could theoretically reconsider at some point in the future. The more likely next step, however, is that the government will immediately appeal this decision to the US Court of Appeals for the Fifth Circuit; at that point, it could be appealed to the Supreme Court.
GC strongly recommends that you consult with your attorney to understand your specific filing requirements and ensure compliance with all applicable regulations. Your legal advisor can provide personalized guidance based on your unique business circumstances.
For more details, see the full opinion at www.caltax.com/files/2024/ttcsvgarland.pdf. Don’t hesitate to contact our friendly team if you have further questions.