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Federal Appeals Court Pauses BOI Reporting Requirement Again

On Behalf of | Jan 13, 2025 | Business Law

In a recent development, a federal appeals court has once again suspended the requirement for businesses to file Beneficial Ownership Information (BOI) reports. This ruling comes shortly after a previous decision mandated that millions of small businesses submit BOI reports by January 13, 2025.

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) responded by stating that businesses are not currently required to file BOI reports and will not face penalties for non-compliance while the court order stands. However, businesses may still submit these reports voluntarily. See https://fincen.gov/boi

Business groups, such as the National Federation of Independent Business (NFIB), welcomed the decision, highlighting the confusion and stress caused by the fluctuating requirements. See https://www.nfib.com/protect-small-business-privacy/

Purpose of BOI Requirements

The BOI reporting rules, introduced under the Corporate Transparency Act (CTA), aim to combat financial crimes like money laundering and fraud by requiring companies to disclose information about their beneficial owners to FinCEN. Non-compliance could lead to civil or criminal penalties.

Timeline of Events

January 1, 2021: The CTA is enacted.

January 1, 2024: BOI reporting requirements take effect.

December 3, 2024: A Texas district court suspends the nationwide enforcement of the CTA, questioning its constitutionality.

December 6, 2024: FinCEN announces that filing BOI reports is not currently required.

December 23, 2024: The Fifth Circuit reinstates the reporting requirement, moving the deadline to January 13, 2025.

December 26, 2024: The Fifth Circuit suspends the requirement again with a preliminary injunction.

December 27, 2024: FinCEN confirms that BOI reports are not required in January, pending further review in February 2025.

Looking Ahead

The legal situation remains uncertain. Future court rulings or potential legislative changes could further alter BOI reporting requirements.

Please stay updated by following the BOI requirement published by the FinCEN https://fincen.gov/boi or consult your legal advisor for guidance or if you choose to file a BOI report voluntarily.