Update on Injunction and Next Steps

The U.S. District Court for the Eastern District of Texas has stayed the last remaining nationwide preliminary injunction enjoining the federal government from enforcing the Corporate Transparency Act (“CTA”), which was first issued by a lower court in the case Smith et al. v. U.S. Department of the Treasury.  

The Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) has issued a statement confirming that beneficial ownership information (“BOI”) reporting requirements under the CTA are once again back in effect.  For now, FinCEN has generally extended the BOI reporting deadline by 30 calendar days from February 19, 2025, for most companies.  This means that most companies required to file a BOI report under the CTA must file by March 21, 2025.    

FinCEN’s statement noted that during this 30-day period, FinCEN will “assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks.”  FinCEN also indicated that it “intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.”

While FinCEN may further extend the BOI reporting deadline, or revise the BOI reporting requirements, for certain companies in the future, this is not certain.  Therefore, we recommend that all companies required to file a BOI report under the CTA prepare to submit the report by the current deadline of March 21, 2025.  

Casner & Edwards will continue to monitor developments and provide updates.  

Background Information

The CTA is a new federal law that took effect on January 1, 2024.  It was enacted to combat money laundering, and under the CTA, all companies that are “reporting companies” must file certain beneficial ownership reports with the Department of Treasury’s Financial Crimes Enforcement Network.  Information on the CTA and its requirements and exemptions can be found in our previous client alerts of January 31, 2024 and October 15, 2024.  Additional information on the Texas Top Cop Shop, Inc., et al. v. Garland and the Smith et al. v. U.S. Department of the Treasury nationwide injunctions can be found in our previous client alerts of December 10, 2024, December 24, 2024, January 9, 2025, and January 27, 2025.

Questions

If you have any questions, please contact Casner & Edwards attorneys Peter Dunn, Michael Zullas, Steven Ayr, or Drew Douglas-Steele