On December 3, 2024, the United States District Court for the Eastern District of Texas (Mazzant, J.), granted a preliminary, nationwide injunction barring the enforcement of the Corporate Transparency Act (the “CTA”) and 31 C.F.R. 1010.380 (the “Reporting Rule”), which requires “reporting companies” (most small businesses and some tax-exempt organizations) to submit “Beneficial Ownership Information Reports” (“BOI Reports”) to the Financial Crimes Enforcement Network (“FinCEN”). See generally Texas Top Cop Shop, Inc., et al. v. Merrick Garland, Attorney General of the United States, et al., No. 4:24-CV-478 (E.D. Tex. Filed Dec. 3, 2024).
So, what does that mean for you as a business owner? Until further notice, you need not submit an online BOI Report to FinCEN. For the time being, the Reporting Rule is no longer enforceable and the January 1, 2025 deadline to submit a BOI Report no longer exists. Unfortunately, this is only a preliminary injunction, and you must also remain alert for potential appeals: an appeal of the preliminary injunction could result in its reversal or narrowing which could ultimately mean the reinstatement of the January 1, 2025 deadline or a later deadline altogether.
If you have not yet submitted a BOI Report to FinCEN for your business, we recommend that you prepare the necessary information in the event that an appeal is successful during the month of December. That said, the “political winds” and court processes do not suggest that reinstatement is likely in the immediate future. Please do stay informed. Devine Millimet will continue to monitor developments in this and other cases involving the CTA.
