OK, bear with me for just a moment as we outline recent events related to business owners’ requirements to file their Beneficial Owner Information report (BOIR) with FinCEN, to comply with the Corporate Transparency Act (CTA).
As most of those who have been following this law know, a universal injunction had been issued in the case of McHenry v. Texas Top Cop Shop, Inc., meaning that business owners were under no obligation to file their BOIR while the injunction remained in effect.
However, on January 23, 2025, the Supreme Court made an important decision in the same case, issuing a stay on the district court’s universal injunction, meaning that FinCEN could begin enforcing the CTA, at least until a final decision is reached. In practical terms, this ruling reinstated the Corporate Transparency Act, and the Fifth Circuit has scheduled oral arguments for March 25, 2025.
BUT
After that Supreme Court decision on January 23, 2025, there was a flurry of activity, and FinCEN updated their website to note:
As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
This is still unclear because the injunction in Smith case only referred to enforcement against the plaintiffs in that case, and not an injunction against enforcement of the law as a whole. That said, there appears no indication that FinCEN is inclined to enforce the CTA for the moment, since no mention of an appeal was made in the Smith case.
So, we’ll keep you posted as things progress, but for the moment, it does not appear that filing is required yet, but voluntary reporting is still being accepted.
Somebody please pass the Tylenol….
