Update December 27, 2024: REQUIREMENT ON HOLD AGAIN: 

The legal battle over the Corporate Transparency Act (CTA) continues. As of December 27^th, 2024, the preliminary injunction has been reinstated, temporarily halting enforcement of the CTA, including the requirement to file Beneficial Ownership Information (BOI) reports. To avoid any confusion, a timeline of relevant decisions is below:

• Tuesday, December 3^rd, 2024, the District Court for the Eastern District of Texas ordered a nationwide injunction of the CTA and halted enforcement of the act, including the requirement to file BOI reports by January 1, 2025.

• Monday, December 23^rd, the Fifth Circuit Court of Appeals stayed the injunction, reinstating the reporting requirement. FinCEN then immediately extended the reporting deadline to January 13, 2025.

• Thursday, December 26^th, the Fifth Circuit reversed its order and vacated the stay of the injunction, once again halting the CTA and the BOI reporting requirements.

Update December 3, 2024:  Nationwide Injunction Blocks Enforcement of Corporate Transparency Act

On December 3, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction blocking enforcement of the Corporate Transparency Act (CTA).

Temporary Block on BOI Reporting: The Court’s order states that neither the CTA nor the implementing rules adopted by the Financial Crimes Enforcement Network may be enforced. In contrast with the injunction issued in National Small Business United v. Yellen, which applied only to the plaintiffs in that case, the Texas Top Cop Shop injunction applies nationwide.

Impact on Businesses: The CTA provides that “reporting companies” (as defined by the CTA) formed prior to January 1, 2024, must file an initial beneficial ownership information report before January 1, 2025, while reporting companies formed after January 1, 2024, were to file within 90 days of formation. Under the Texas Top Cop Shop injunction order, reporting companies (regardless of when they were formed) do not need to comply with the filing requirements, pending further order of the Court. 

Uncertainty Regarding Future Enforcement: The Court’s order is not a final decision, so businesses should remain cautious and be prepared to comply with the CTA reporting requirements if they are revived as the case proceeds, or if the injunction is lifted.

November 11, 2024   If you hold property in, or your business is within, an LLC or Sub-S Corp this new regulation most likely affects you and the penalties for not filing are brutal.   You can file without charge at FinCen BOIR Filing.

I’m not a tax attorney or accountant.  However, within my practice as a Broker Associate, I have learned that many of my clients are not aware of this. The following is my understanding of the new law however you should seek the advice of a tax professional. 

The Beneficial Ownership Information Reporting (BOIR) requirement is a new federal mandate that affects most businesses in the United States. Stemming from the Corporate Transparency Act (CTA), this regulation requires companies to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). A beneficial owner is generally defined as someone who directly or indirectly owns or controls 25% or more of the company or has significant decision-making authority within it.

The deadline for BOIR compliance depends on when your business was formed. Companies established before January 1, 2024, must file their initial BOIR by January 1, 2025. For businesses formed on or after January 1, 2024, the filing must be completed within 90 days of receiving notice of the company's registration. It's crucial for business owners to be aware of this requirement, as non-compliance can result in significant penalties, including daily fines of up to $500 and potential criminal charges. The primary goal of BOIR is to increase transparency in business ownership and help combat financial crimes such as money laundering and terrorism financing

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