Pending Appeal in Fifth Circuit – in the Latest Update on the CTA, “it’s back on”
On February 17, 2025, in Smith v. U.S. Department of the Treasury, No. 6:24-cv-00336 (E.D. Tex. Feb. 17, 2025), the US District Court for the Eastern District of Texas stayed the nationwide injunction it had issued January 7, 2025, halting enforcement of the Beneficial Ownership Information (BOI) Reporting Rule implementing the Corporate Transparency Act (CTA) in light of the US Supreme Court’s January 23, 2025, order in Texas Top Cop Shop v. McHenry (formerly Texas Top Cop Shop v. Garland). In Texas Top Cop Shop, the US Supreme Court stayed the preliminary injunction blocking enforcement of the CTA pending disposition of the appeal in the Fifth Circuit Court of Appeals and disposition of the petition for the writ of certiorari. Oral arguments are scheduled for March 25, 2025, in the Texas Top Cop Shop case.
FinCEN issued new guidance in notice FIN-2025-CTA1 (FinCEN Notice, FIN-2025-CTA1, 2/18/2025) with the February 18, 2025 decision by the US District Court for the Eastern District of Texas in Smith et al. v. U.S. Department of Treasury et al., beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again back in effect.
For most companies the deadline has been extended an additional 30 calendar days from February 19, 2025 because of the need for additional time to comply due to the court rulings that have been in place. During the 30 days FinCEN will assess options to further modify deadlines. FinCEN is also reviewing and intends to revise the BOI reporting rule to reduce the burden on many U.S. small businesses.
For most reporting companies March 21, 2025 is the new deadline to file your initial, updated, or corrected BOI report.
There are several other district court cases on appeal in various circuits so the legal challenges continue.
In addition to court cases, legislative action is pending. On January 15, 2025, the “Repealing Big Brother Overreach Act” was reintroduced in the US Senate and House of Representatives. That act would repeal the CTA if it were enacted. The House of Representatives passed the “Protect Small Businesses from Excessive Paperwork Act of 2025” on February 10, 2025, which would extend the deadline for BOI filing to January 1, 2026 if it were to be enacted.
