Beneficial Ownership Information Reporting requirements are back in effect as of February 17, 2025 following a decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.). The new filing deadline for most entities is March 21, 2025.
Background
The Corporate Transparency Act (CTA) was introduced to enhance corporate transparency by mandating certain entities to report detailed ownership information to the Financial Crimes Enforcement Network (FinCEN).
There has been ongoing litigation since December of 2024 relating to the constitutionality of the CTA and as a result thereof, the enforcement of the Beneficial Ownership Information Reporting (BOIR) filing deadline has been yo-yoed back and forth.
The Recent Court Ruling
On February 17, 2025, the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.) issued a decision wherein it lifted the nationwide injunction preventing the enforcement of the CTA BOIR deadlines.
As of February 17, 2025, the CTA is again being enforced.
New Filing Deadlines
The Department of Treasury has provided notice that the vast majority of entities are now required to file their initial BOIR by March 21, 2025.
In its recent notice, the Department of Treasury indicated that it will be assessing its options to further modify deadlines and intends to initiate a process in 2025 to revise the BOIR rule to reduce the burden for entities deemed “lower-risk”.
What’s Next?
While the legal battle surrounding the CTA is not over, entities should work diligently to meet the new March 21, 2025 filing deadline to avoid any penalties. We will be monitoring FinCEN for any updates relating to the CTA’s enforcement, filing deadlines, or rule changes.
