Baker, Donelson, Bearman, Caldwell & Berkowitz PC
01/24/2025 | News release | Distributed by Public on 01/24/2025 17:27
CTA Filings Remain Voluntary... For Now
A flurry of activity in the courts and guidance from FinCEN this week has the Corporate Transparency Act back in the news. However, the recent activity does not result in any immediate change for businesses. Filing beneficial ownership information (BOI) reports remains voluntary pending the resolution of further litigation.
On January 23, the U.S. Supreme Court granted the government's motion to stay the nationwide preliminary injunction enjoining enforcement of the Corporate Transparency Act that was originally issued by the Eastern District of Texas in Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-CV-478 (E.D. Tex.).
Even so, the injunction on CTA enforcement granted in Smith, et al. v. United States Department of the Treasury, et al., No. 6:24-CV-336 (E.D. Tex.),remains in place. FinCEN confirmed its agreement with this position by publishing the following information on its website on January 24, 2025:
"[R]eporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court's action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports." (https://www.fincen.gov/boi)
Further developments, court rulings, and potential changes by FinCEN are expected. As this situation develops, you can expect further client alerts from our Corporate Transparency Act team, as we will continue to keep you informed on the reporting obligations of businesses and their owners.
If you have questions or concerns regarding this alert, please reach out to Jake Farrar, Lucas Lopez, or any member of Baker Donelson's Business and Corporate team.