There have been material developments regarding the Corporate Transparency Act (CTA) and the related Beneficial Owner Information (BOI) reporting.
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction temporarily prohibiting the federal government from enforcing the CTA and its reporting deadlines. As a result, reporting companies are not currently required to file BOI and will not be liable for penalties for not filing until the order stays in place.
The injunction applies nationwide, meaning that all companies subject to the CTA’s reporting requirements are currently exempt from filing beneficial ownership reports until further notice.
The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024.
FinCEN stated that they will comply with the order until it remains in effect, however, they also noted that: “The government continues to believe—consistent with the conclusions of the U.S. District Courts for the Eastern District of Virginia and the District of Oregon—that the CTA is constitutional”.
As a result of the above, reporting FinCEN kept the option for reporting companies to voluntarily comply with the CTA and file their BOI reports.
We will continue to monitor the litigation developments closely and will keep you informed.
Should you have any questions or need assistance, feel free to reach out to your Grassi advisor.
