News: BOI Temporarily Halted by Preliminary Injunction

* Post Updated *
The Financial Crimes Enforcement Network (FinCEN) reviewed the order of the preliminary injunction Wednesday, pointing out that other courts have denied similar requests.  As of Thursday, December 5, 2024, the U.S. Department of Justice has filed an notice of appeal.

 

Late Tuesday, December 3, 2024, a federal court in Texas imposed a preliminary injunction, on a nationwide basis, blocking the enforcement of the Corporate Transparency Act’s (CTA’s) Beneficial Ownership Information reporting requirements – more commonly referred to as BOI, or BOIR.

Wait, remind me, what is BOI?

In 2021, Congress enacted the Corporate Transparency Act, which requires many U.S. companies to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury.  Those businesses which are required to file are known as reporting companies.  Certain business entities may be exempt from filing, and can determine on their own whether they may be exempt by using the detailed checklist provided in FinCEN’s Small Entity Compliance Guide.  Based on the original rules surrounding the CTA’s BOI reporting requirements, reporting companies which were created or registered with their state before January 1, 2024, must file their BOI report by January 1, 2025.  Reporting companies created or registered on or after January 1, 2024, must file their BOI report within 90 days of creation/registration.  And any updates or corrections to previously filed BOI reports must be submitted within 30 days.

So, what does the preliminary injunction mean?

This preliminary injunction means, “[existing] reporting companies need not comply with the CTA’s January 1, 2025 BOI reporting deadline.”  And the BOI reporting deadline is pending further order of the court.

As this ruling occurred within the past 24 hours, we are still seeking additional information and guidance from government agencies.  However, it is important to note, the U.S. Government is expected to file an appeal.

This may cause the courts to lift the injunction;  or it may not.  There is no guarantee, however, that the injunction will not be lifted.  If lifted, BOI reports may be held to the original filing deadlines, or a different deadline may be chosen.  This may depend on when the possible federal appeal will be heard, and whether the court decision will grant additional time to file.  We cannot speak to how penalties for late filing may be handled going forward, but will provide an update as soon as we have one.

What is ATLAS doing about this?

ATLAS is aware of the injunction, and closely monitoring these developments.  As this ruling only occurred within the past 24 hours, we are still seeking additional information and guidance from government agencies.  We will continue to track all news related to this, and provide additional updates to our clients as they come.

ATLAS plans to continue offering BOI reporting services to our clients.  We understand some clients may wish to avoid the confusion and uncertainty of this situation, and protect themselves against any unknowns, by ensuring their BOI report is filed by the original January 1, 2025 deadline.

We will also continue to assist our clients with any questions they may have, as we always aim to care for our clients’ needs.  We, at ATLAS, will continue to do what we can to assist our clients with compliance, regardless of the outcome of the injunction.

For any clients with a BOI report already filed – you do not need to take any action at this time.  If action is required at a later date, we will be sure to include this information in a future update.

As always – if you have any questions regarding BOI, whether this filing requirement may apply to you and your business, or how this preliminary injunction may impact your own filing requirements – please do not hesitate to reach out!  We are always happy to help.