New FinCEN Ownership Reporting Rules Set to Take Effect After Court Lifts Injunction
The U.S. Court of Appeals for the 5th Circuit stayed a nationwide injunction of the Corporate Transparency Act’s beneficial ownership information (BOI) reporting requirements on Dec. 23, temporarily lifting a recent federal court order that was set to block the rules from taking effect for most companies Jan. 1 (see 2412090065).
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The Financial Crimes Enforcement Network said this means all companies subject to the BOI reporting rules are “once again required to file beneficial ownership information” with the agency, although FinCEN said it’s extending certain filing deadlines. One extension will allow new companies that were created or registered before Jan. 1, 2024, to file their initial BOI reports with FinCEN up until Jan. 13, 2025, instead of the original Jan. 1 date.
Other date extensions are outlined in the FinCEN notice.
The decision comes less than a month after a federal court in Texas said the CTA was unconstitutional and issued a preliminary injunction blocking FinCEN from enforcing the new reporting requirements. The appellate court set the matter for “expedited oral argument,” Thompson Hine said in a client alert, which won’t occur until Jan. 6 at the earliest.
The BOI reporting rules are designed to help the government prevent sanctioned parties and others from hiding money or property in the U.S. by requiring those companies to provide FinCEN with detailed ownership information (see 2312210017 and 2401050023). Some lawmakers had called on the Treasury Department to push back implementation of the new requirements, partly because they said small businesses needed more time to comply (see 2411190066).
Rep. French Hill, R-Ark., who is slated to become chairman of the House Financial Services Committee in January, said he is disappointed the reporting requirements were reinstated and that he “will work with the incoming Trump administration to halt and revise the implementation of this harmful law and accompanying rules.”