FinCEN: Announces businesses are not required to file Beneficial Ownership Information (BOI)

The Financial Crimes Enforcement Network (FinCEN), part of the U.S. Treasury Department, has announced that businesses are not currently required to file Beneficial Ownership Information (BOI) reports due to recent legal developments.

This update follows a federal court decision in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al.

According to a FinCEN statement dated January 2, “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, the statement also clarifies that businesses can voluntarily submit BOI reports if they choose to.

The U.S. District Court for the Eastern District of Texas issued a preliminary injunction in early December, temporarily blocking the Treasury Department from enforcing BOI reporting requirements under the Corporate Transparency Act (CTA). Subsequently, the U.S. Fifth Circuit Court of Appeals stayed this preliminary injunction, leading FinCEN to extend the reporting deadlines on December 23 to give companies more time to comply.

Just three days later, a separate panel from the Fifth Circuit vacated the stay, reinstating the preliminary injunction. On December 31, the Department of Justice, representing the Treasury, requested that the Supreme Court intervene by staying the injunction while the appeal continues.

The case, Texas Top Cop Shop, Inc., is among several legal challenges arguing that the CTA exceeds the constitutional limits of Congress’s authority. In March of last year, the U.S. District Court for the Northern District of Alabama ruled that the government was not enforcing the CTA against the plaintiffs in a separate lawsuit. However, other courts have sided with the Treasury, rejecting similar requests to block the enforcement of the CTA.

As this legal situation evolves, it remains crucial for businesses to stay informed about their obligations under the CTA and any updates from FinCEN.

Source:

https://www.doddfrankupdate.com/dfu/articlesdfu/court-order-stays-boi-reporting-requirements-93366.aspx