Written by James A. Carolan, CWS®, CTFA | Sr. Estate Planning Attorney for EWM Legal Solutions
As we reported, the court in the Texas Cop Shop case issued a nationwide injunction that prohibits enforcement of the beneficial ownership information (BOI) reporting rules and reporting deadlines by FinCEN. As of December 3, 2024, covered entities are not required to file by January 1, 2025.
The situation is evolving rapidly.
The U.S. Department of Justice (DOJ) filed an appeal on December 13, 2024, and an emergency motion with the U.S. Court of Appeals for the Fifth Circuit to stay the nationwide preliminary injunction.
The Fifth Circuit accelerated the briefing schedule so that they can fully consider the issues by December 19, 2024. As a result, we expect that the Fifth Circuit will issue a ruling as early as December 27, 2024, regarding the nationwide application of the injunction or deny the request of the DOJ for a stay altogether.
We recommend that since it is possible that the reporting requirements COULD be reinstated on short notice, reporting entities should be prepared to file their BOI reports if the Fifth Circuit were to issue a stay of the injunction or were to limit the injunction to only the plaintiffs in Texas Cop Shop. You do not need to file yet but only be prepared to file on short notice.
In addition to the Fifth Circuit appeal, we also have Congress and its action on the Continuing Resolution (CR) for funding the government. The initial 1,500-page CR had a provision to delay the BOI filing and FinCEN enforcement for another year to give more time to understand the effects on clients. That CR failed, as we all know. The alternative “plan B” CR also appears to have failed.
This situation continues to be fluid, and we continue to monitor it. As it stands today, December 20, 2024, there is no final decision from the Fifth Circuit. Reporting entities still do not have to file BOI reports, the preliminary injunction remains in effect. However, be ready to file on short notice should the Fifth Circuit rule to either lift the injunction or limit the injunction to only the plaintiff in Texas Cop Shop and allow FinCEN to enforce BOI filing by January 1, 2025. You can prepare your filing and hold them to be ready to file quickly.
This matter will likely continue to move through the courts regardless of the Fifth Circuit’s action on the appeal and motion. With the number of cases in the system, I believe that it is only a matter of time before the U.S. Supreme Court will be asked to take the matter up to decide the constitutionality of the reporting requirements.
Where to Start?
Contact me at EWM Legal Solutions. I’m here to assist you in these kinds of legal matters, helping you protect what you care about most.
James A. Carolan, CWS®, CTFA
Sr. Estate Planning Attorney
Executive Wealth Management and EWM Legal Solutions are separate but affiliated companies. Executive Wealth Management (EWM) is a Registered Investment Advisor with the Securities and Exchange Commission. Reference to registration does not imply any specific level of qualification or skill. Investment Advisor Representatives of EWM offer Investment Advice and Financial Planning Services to customers located within the United States.
