LEGAL UPDATE – Corporate Transparency Act BOI Report Whiplash – Report Deadlines are Suspended Again

Corporate Transparency Act BOI Report Whiplash – Report Deadlines are Suspended Again

We previously reported that a federal judge in Texas issued a nationwide injunction blocking the federal government from enforcing the anti-money laundering law that required most small business owners to file beneficial ownership reports with the Financial Crimes Enforcement Network (“FinCEN”) under the Corporate Transparency Act.  The government appealed that ruling and the US Court of Appeals for the 5^th Circuit overturned the injunction on December 23 saying that the law can now be enforced.  FinCEN then issued an order giving business owners until January 13 to file their reports.   But late last week a different panel of the US Court of Appeals for the 5^th Circuit reinstated the injunction in an after-hours ruling.    See https://www.fincen.gov/boi for more information.

FinCEN published the following statement after this court decision:

In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

As of this moment, BOI reports are not legally required.  But as with the prior court rulings, that can change with little notice and if it does, the government has a track record of imposing short deadlines to comply.  The current ruling is only temporary until the Court of Appeals considers the merits of the case and ultimately decides whether the Corporate Transparency Act is unconstitutional.  If the Court rules that this law is unconstitutional, the injunction will become permanent; but if it upholds the law, then the injunction will be lifted and the requirement to file reinstated.  It is up to you whether you want to voluntarily file your report in the meantime or continue to monitor the situation.

The business practices team at Harpst Becker, LLC is here for your company’s legal needs.  If you have questions, or need further information, please feel free to contact a member of our business practices team: