IMPORTANT UPDATES as of 3/21/25

The Corporate Transparency Act ("CTA") has been through a rollercoaster journey, undergoing significant developments in both 2024 and 2025. The latest development, and potentially most important thus far, is the halt in enforcement of the CTA for U.S. citizens and domestic reporting companies.

In our previous articles, we provided the background informationsurrounding the CTA, which required businesses to disclose beneficial ownership information (“BOI”) to the Financial Crimes Enforcement Network (“FinCEN”) in an effort to curb illicit activities. The CTA’s original framework required "reporting companies," including corporations, limited liability companies (LLCs), and similar entities, to submit detailed ownership information to FinCEN. Exemptions existed for certain regulated entities, such as public companies, banks, and large operating companies meeting specific criteria.

Recently, on March 2, 2025, the U.S. Department of the Treasury (“Treasury”) announced that enforcement of the CTA would be suspended for U.S. citizens, domestic reporting companies, and their beneficial owners. This announcement was then carried out in an interim final rule (the “Rule”), released March 21, 2025, which exempts entities previously defined as “domestic reporting companies” from reporting requirements. This means that entities, including healthcare entities, previously considered "domestic reporting companies" are now exempt from BOI reporting requirements. 

The Rule extends the deadline or foreign reporting companies to file initial BOI reports, and to update or correct previously filed BOI reports, to April 20, 2025 (30 days from the publication of the Rule). However, the Rule exempts foreign reporting companies from having to report the BOI of any U.S. persons who are beneficial owners of the foreign reporting company and exempts U.S. persons from having to provide such information to any foreign reporting company for which they are a beneficial owner. FinCEN is accepting comments on the Rule and will assess the exemptions, as appropriate, in light of those comments. FinCEN intends to issue a Final Rule later this year. This development is especially significant for healthcare organizations that often have complex ownership structures and smaller healthcare practices. 

While all entities created in the United States, including those previously known as “domestic reporting companies,” and their beneficial owners are now considered exempt from BOI reporting requirements, the CTA continues to face ongoing constitutional challenges, notably before the Fifth Circuit Court of Appeals. Accordingly, staying informed and prepared for future updates is crucial for healthcare and other businesses operating in dynamic regulatory environments. Companies involving foreign ownership or control structures should review their governance frameworks to ensure readiness for future CTA reporting obligations.

FinCEN Removes Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons, Sets New Deadlines for Foreign Companies

WASHINGTON––Consistent with the U.S. Department of the Treasury’s March 2, 2025 announcement, the Financial Crimes Enforcement Network (FinCEN) is issuing an interim final rule that removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act.

In that interim final rule, FinCEN revises the definition of “reporting company” in its implementing regulations to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCEN also exempts entities previously known as “domestic reporting companies” from BOI reporting requirements.

Thus, through this interim final rule, all entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners will be exempt from the requirement to report BOI to FinCEN. Foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN under new deadlines, detailed below. These foreign entities, however, will not be required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner. For more information, see https://fincen.gov/news/news-releases/fincen-removes-beneficial-ownership-reporting-requirements-us-companies-and-us.

BOI REPORTING UPDATE AS OF 

2-27-2025

FinCEN Not Issuing Fines or Penalties in Connection with Beneficial Ownership Information Reporting Deadlines 

Immediate release: February 27, 2025

WASHINGTON––Today, FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed. This announcement continues Treasury’s commitment to reducing regulatory burden on businesses, as well as prioritizing under the Corporate Transparency Act reporting of BOI for those entities that pose the most significant law enforcement and national security risks.

No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity as quickly as possible, while ensuring that BOI that is highly useful to important national security, intelligence, and law enforcement activities is reported.

FinCEN also intends to solicit public comment on potential revisions to existing BOI reporting requirements. FinCEN will consider those comments as part of a notice of proposed rulemaking anticipated to be issued later this year to minimize burden on small businesses while ensuring that BOI is highly useful to important national security, intelligence, and law enforcement activities, as well to determine what, if any, modifications to the deadlines referenced here should be considered.

2-19-2025

FinCEN Updates: Corporate Transparency Act Reporting Requirements Back in Effect with Extended Reporting Deadline; FinCEN Announces Intention to Revise Reporting RuleCorporate Transparency Act Reporting Requirements Back in Effect with Extended Reporting Deadline; FinCEN Announces Intention to Revise Reporting Rule

Following the February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336, the Financial Crimes Enforcement Network (FinCEN) has announced that beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act are back in effect, with a new deadline of March 21, 2025 for most companies.

FinCEN has also announced that it will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.

Notice: https://www.fincen.gov/sites/default/files/shared/FinCEN-BOI-Notice-Deadline-Extension-508FINAL.pdf

Prior notice:1-13-2025

Alert: Ongoing Litigation – Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.) & Voluntary Submissions [Updated January 2, 2025]

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.

Current Status of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.) and Voluntary Submissions

The Corporate Transparency Act (CTA) plays a vital role in protecting the U.S. and international financial systems, as well as people across the country, from illicit finance threats like terrorist financing, drug trafficking, and money laundering. The CTA levels the playing field for tens of millions of law-abiding small businesses across the United States and makes it harder for bad actors to exploit loopholes in order to gain an unfair advantage.

On Tuesday, December 3, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), the U.S. District Court for the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction. The Department of Justice, on behalf of the Department of the Treasury (Treasury), filed a Notice of Appeal on December 5, 2024 and separately sought of stay of the injunction pending that appeal.

On December 23, 2024, a panel of the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction entered in Texas Top Cop Shop, Inc., pending the outcome of Treasury’s ongoing appeal of the district court’s order. Treasury immediately issued an alert notifying the public of this ruling and recognizing that reporting companies may have needed additional time to comply with beneficial ownership reporting requirements, Treasury extended reporting deadlines. However, on December 26, 2024, a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the Court’s December 23, 2024 order granting a stay of the preliminary injunction. On December 31, 2024, the Department of Justice, on behalf of Treasury, sought a stay of the injunction pending the ongoing appeal from the Supreme Court of the United States.

In the meantime, as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. is once again in effect. FinCEN is complying with—and will continue to comply with—the district court’s order for as long as it remains in effect. As a result, reporting companies are not currently required to file beneficial ownership information with FinCEN. Reporting companies may continue to voluntarily submit beneficial ownership information reports.

Other Updates

Texas Top Cop Shop, Inc. is only one of several cases that have challenged the Corporate Transparency Act (CTA) pending before courts around the country.

As noted in a separate alert, on March 1, 2024, the U.S. District Court for the Northern District of Alabama, Northeastern Division, entered a final declaratory judgment, concluding that the CTA exceeds the Constitution’s limits on Congress’s power and enjoining Treasury from enforcing the CTA against the plaintiffs. As a result, the government, even in the absence of an injunction, is not currently enforcing the Corporate Transparency Act against the plaintiffs in that action: Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024). Treasury has appealed that judgment, and that appeal is pending before the Eleventh Circuit.

However, since March 2024, other district courts have denied requests to enjoin the CTA, ruling in favor of Treasury—in particular:

• On April 29, 2024, in Small      Business Association of Michigan, et al. v. Yellen, et al., No.      1:24-cv-314 (W.D. Mich.), the U.S. District Court of the Western District      of Michigan, denied a motion for a preliminary injunction.
• On September 20, 2024, in      Firestone, et al. v. Yellen, et al., No. 3:24-cv-01034 (D. Or.), the U.S.      District Court for the District of Oregon also declined to issue a      preliminary injunction on behalf of plaintiffs—seven      individuals—challenging the constitutionality of the CTA. In denying      plaintiffs’ motion, the district court found that plaintiffs had not shown      a likelihood of success on the merits with respect to their claims that      the CTA exceeds Congress’ authority under the Constitution and violates the      First, Fourth, Fifth, Eighth, Ninth, and Tenth Amendments. In its opinion      and order, the district court noted that enjoining enforcement of the CTA      “would interfere with Congress’ judgment, supported by extensive factual      findings, about how best to combat money laundering, the financing of      terrorism, tax fraud, and other serious crimes that affect the national      economy or national security.” Plaintiffs have appealed the court’s      decision, and that appeal is pending before the Ninth Circuit.
• On October 24, 2024, in      Community Associations Institute, et al. v. Yellen, et al., No.      1:24-cv-01597 (E.D. Va.), the U.S. District Court for the Eastern District      of Virginia likewise denied a motion by plaintiffs, including an      organization that represents community associations throughout the      country, for a preliminary injunction. In doing so, the district court      found that plaintiffs were unlikely to succeed on their claims that (1)      Congress overstepped the outer bounds of its commerce power in enacting the      CTA; (2) the CTA violates the First and Fourth Amendments; and (3) the      statutory exemptions in the CTA relieve community associations of the      obligation to report beneficial ownership information. Plaintiffs have      appealed the court’s decision, and that appeal is pending before the      Fourth Circuit.

The government continues to believe—consistent with the orders issued by the U.S. District Courts for the District of Oregon and the Eastern District of Virginia— that the CTA is constitutional and will continue defending the law as necessary.

BOI Reporting Update

As of 12/27/24:

On December 23, 2024, a panel of the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction entered in the case of Texas Top Cop Shop, Inc. v. Garland, pending the outcome of the Department of the Treasury’s ongoing appeal of the district court’s order. FinCEN immediately issued an alert notifying the public of this ruling, and recognizing that reporting companies may have needed additional time to comply with beneficial ownership reporting requirements, FinCEN extended reporting deadlines. On December 26, 2024, however, a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the Court’s December 23, 2024 order granting a stay of the preliminary injunction. Accordingly, as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. v. Garland is in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN.

Alert: Updates to Beneficial Ownership Information Reporting Deadlines – Beneficial Ownership Information Reporting Requirements Now in Effect, with Deadline Extensions

In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline as follows:

• Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)

On Tuesday, December 3, 2024, a federal district court in Texas issued an order granting a nationwide, preliminary injunction that: (1) enjoins enforcement of the Corporate Transparency Act (CTA) and regulations implementing its beneficial ownership information (BOI) reporting requirements, and (2) stays all deadlines to comply with the CTA’s reporting requirements, including the January 1, 2025 deadline for reporting companies to submit their initial BOI report. The Department of Justice, on behalf of the Department of the Treasury, filed an appeal of the district court’s decision on December 5, 2024.

The Financial Crimes Enforcement Network (FinCEN) has respondedthat as long as the preliminary injunction remains in effect:

• reporting companies are not required to report BOI to FinCEN; and
• reporting companies will not be subject to liability for failing to report their BOI.

FinCEN also indicated that reporting companies may continue to voluntarily submit BOI reports.

What this means:

The future of the CTA and BOI reporting, including when reports need to be submitted, remains fluid and unpredictable. While the Texas district court’s ruling may be the most recent decision issued, it is not the only case in which the CTA has been challenged. Federal district court decisions on the validity of the CTA have conflicted, and three district court cases are currently being appealed to their respective Courts of Appeals. As such, it is strongly advised that CPA firms continue to closely monitor developments and be prepared to respond swiftly if necessary.

Check the FinCEN Beneficial Ownership Information Reportingpage and the AICPA beneficial ownership information (BOI) reporting page for more.
 

BOI Background Information:

The Corporate Transparency Act (“CTA) was enacted into law as part of the National Defense Act for Fiscal Year 2021. The CTA requires the disclosure of the Beneficial Ownership Information (otherwise known as “BOI”) of certain entities from people who own or control a company.
 

Prior to the injunction, there was a January 1, 2025 deadline for reporting companies to submit their initial BOI report, but that deadline is currently on hold. Companies can voluntarily submit the information or choose to hold the reporting until the court cases are resolved.
 

What entities would be required to comply with the CTA’s BOI reporting requirement?
 

Entities organized both in the U.S. and outside the U.S. may be subject to the CTA’s reporting requirements. Domestic companies required to report include corporations, limited liability companies (LLCs) or any similar entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe.
 

Domestic entities that are not created by the filing of a document with a secretary of state or similar office are not required to report under the CTA.
 

Foreign companies required to report under the CTA include corporations, LLCs or any similar entity that is formed under the law of a foreign country and registered to do business in any state or tribal jurisdiction by filing a document with a secretary of state or any similar office.
 

Would there be exemptions from the filing requirements?
 

There are 23 categories of exemptions. Included in the exemptions list are publicly traded companies, banks and credit unions, securities brokers/dealers, public accounting firms, tax-exempt entities and certain inactive entities, among others. Please note these are not blanket exemptions and many of these entities are already heavily regulated by the government and thus already disclose their BOI to a government authority.
 

In addition, certain “large operating entities” are exempt from filing. To qualify for this exemption, the company must: 

1. Employ more than 20 people in the U.S.;
2. Have reported gross revenue (or sales) of over $5M on the prior year’s tax return; and
3. Be physically present in the U.S.

Who is a beneficial owner?
 

Any individual who, directly or indirectly, either: 

• Exercises “substantial control” over a reporting company, or
• Owns or controls at least 25 percent of the ownership interests of a reporting company

An individual has substantial control of a reporting company if they direct, determine or exercise substantial influence over important decisions of the reporting company. This includes any senior officers of the reporting company, regardless of formal title or if they have no ownership interest in the reporting company.
 

The detailed CTA regulations define the terms "substantial control" and "ownership interest" further.
 

What sort of information would be required to be reported?
 

Companies must report the following information: full name of the reporting company, any trade name or doing business as (DBA) name, business address, state or Tribal jurisdiction of formation, and an IRS taxpayer identification number (TIN).
 

Additionally, information on the beneficial owners of the entity and for newly created entities, the company applicants of the entity is required. This information includes — name, birthdate, address, and unique identifying number and issuing jurisdiction from an acceptable identification document (e.g., a driver’s license or passport) and an image of such document.

BOI Reporting Update

As of 12/27/24:

On December 23, 2024, a panel of the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction entered in the case of Texas Top Cop Shop, Inc. v. Garland, pending the outcome of the Department of the Treasury’s ongoing appeal of the district court’s order. FinCEN immediately issued an alert notifying the public of this ruling, and recognizing that reporting companies may have needed additional time to comply with beneficial ownership reporting requirements, FinCEN extended reporting deadlines. On December 26, 2024, however, a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the Court’s December 23, 2024 order granting a stay of the preliminary injunction. Accordingly, as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. v. Garland is in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN.

Alert: Updates to Beneficial Ownership Information Reporting Deadlines – Beneficial Ownership Information Reporting Requirements Now in Effect, with Deadline Extensions

In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline as follows:

• Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)

On Tuesday, December 3, 2024, a federal district court in Texas issued an order granting a nationwide, preliminary injunction that: (1) enjoins enforcement of the Corporate Transparency Act (CTA) and regulations implementing its beneficial ownership information (BOI) reporting requirements, and (2) stays all deadlines to comply with the CTA’s reporting requirements, including the January 1, 2025 deadline for reporting companies to submit their initial BOI report. The Department of Justice, on behalf of the Department of the Treasury, filed an appeal of the district court’s decision on December 5, 2024.

The Financial Crimes Enforcement Network (FinCEN) has respondedthat as long as the preliminary injunction remains in effect:

• reporting companies are not required to report BOI to FinCEN; and
• reporting companies will not be subject to liability for failing to report their BOI.

FinCEN also indicated that reporting companies may continue to voluntarily submit BOI reports.

What this means:

The future of the CTA and BOI reporting, including when reports need to be submitted, remains fluid and unpredictable. While the Texas district court’s ruling may be the most recent decision issued, it is not the only case in which the CTA has been challenged. Federal district court decisions on the validity of the CTA have conflicted, and three district court cases are currently being appealed to their respective Courts of Appeals. As such, it is strongly advised that CPA firms continue to closely monitor developments and be prepared to respond swiftly if necessary.

Check the FinCEN Beneficial Ownership Information Reportingpage and the AICPA beneficial ownership information (BOI) reporting page for more.
 

BOI Background Information:

The Corporate Transparency Act (“CTA) was enacted into law as part of the National Defense Act for Fiscal Year 2021. The CTA requires the disclosure of the Beneficial Ownership Information (otherwise known as “BOI”) of certain entities from people who own or control a company.
 

Prior to the injunction, there was a January 1, 2025 deadline for reporting companies to submit their initial BOI report, but that deadline is currently on hold. Companies can voluntarily submit the information or choose to hold the reporting until the court cases are resolved.
 

What entities would be required to comply with the CTA’s BOI reporting requirement?
 

Entities organized both in the U.S. and outside the U.S. may be subject to the CTA’s reporting requirements. Domestic companies required to report include corporations, limited liability companies (LLCs) or any similar entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe.
 

Domestic entities that are not created by the filing of a document with a secretary of state or similar office are not required to report under the CTA.
 

Foreign companies required to report under the CTA include corporations, LLCs or any similar entity that is formed under the law of a foreign country and registered to do business in any state or tribal jurisdiction by filing a document with a secretary of state or any similar office.
 

Would there be exemptions from the filing requirements?
 

There are 23 categories of exemptions. Included in the exemptions list are publicly traded companies, banks and credit unions, securities brokers/dealers, public accounting firms, tax-exempt entities and certain inactive entities, among others. Please note these are not blanket exemptions and many of these entities are already heavily regulated by the government and thus already disclose their BOI to a government authority.
 

In addition, certain “large operating entities” are exempt from filing. To qualify for this exemption, the company must: 

1. Employ more than 20 people in the U.S.;
2. Have reported gross revenue (or sales) of over $5M on the prior year’s tax return; and
3. Be physically present in the U.S.

Who is a beneficial owner?
 

Any individual who, directly or indirectly, either: 

• Exercises “substantial control” over a reporting company, or
• Owns or controls at least 25 percent of the ownership interests of a reporting company

An individual has substantial control of a reporting company if they direct, determine or exercise substantial influence over important decisions of the reporting company. This includes any senior officers of the reporting company, regardless of formal title or if they have no ownership interest in the reporting company.
 

The detailed CTA regulations define the terms "substantial control" and "ownership interest" further.
 

What sort of information would be required to be reported?
 

Companies must report the following information: full name of the reporting company, any trade name or doing business as (DBA) name, business address, state or Tribal jurisdiction of formation, and an IRS taxpayer identification number (TIN).
 

Additionally, information on the beneficial owners of the entity and for newly created entities, the company applicants of the entity is required. This information includes — name, birthdate, address, and unique identifying number and issuing jurisdiction from an acceptable identification document (e.g., a driver’s license or passport) and an image of such document.

BOI Reporting Update

As of 12/27/24:

On December 23, 2024, a panel of the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction entered in the case of Texas Top Cop Shop, Inc. v. Garland, pending the outcome of the Department of the Treasury’s ongoing appeal of the district court’s order. FinCEN immediately issued an alert notifying the public of this ruling, and recognizing that reporting companies may have needed additional time to comply with beneficial ownership reporting requirements, FinCEN extended reporting deadlines. On December 26, 2024, however, a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the Court’s December 23, 2024 order granting a stay of the preliminary injunction. Accordingly, as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. v. Garland is in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN.

Alert: Updates to Beneficial Ownership Information Reporting Deadlines – Beneficial Ownership Information Reporting Requirements Now in Effect, with Deadline Extensions

In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline as follows:

• Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)

On Tuesday, December 3, 2024, a federal district court in Texas issued an order granting a nationwide, preliminary injunction that: (1) enjoins enforcement of the Corporate Transparency Act (CTA) and regulations implementing its beneficial ownership information (BOI) reporting requirements, and (2) stays all deadlines to comply with the CTA’s reporting requirements, including the January 1, 2025 deadline for reporting companies to submit their initial BOI report. The Department of Justice, on behalf of the Department of the Treasury, filed an appeal of the district court’s decision on December 5, 2024.

The Financial Crimes Enforcement Network (FinCEN) has respondedthat as long as the preliminary injunction remains in effect:

• reporting companies are not required to report BOI to FinCEN; and
• reporting companies will not be subject to liability for failing to report their BOI.

FinCEN also indicated that reporting companies may continue to voluntarily submit BOI reports.

What this means:

The future of the CTA and BOI reporting, including when reports need to be submitted, remains fluid and unpredictable. While the Texas district court’s ruling may be the most recent decision issued, it is not the only case in which the CTA has been challenged. Federal district court decisions on the validity of the CTA have conflicted, and three district court cases are currently being appealed to their respective Courts of Appeals. As such, it is strongly advised that CPA firms continue to closely monitor developments and be prepared to respond swiftly if necessary.

Check the FinCEN Beneficial Ownership Information Reportingpage and the AICPA beneficial ownership information (BOI) reporting page for more.
 

BOI Background Information:

The Corporate Transparency Act (“CTA) was enacted into law as part of the National Defense Act for Fiscal Year 2021. The CTA requires the disclosure of the Beneficial Ownership Information (otherwise known as “BOI”) of certain entities from people who own or control a company.
 

Prior to the injunction, there was a January 1, 2025 deadline for reporting companies to submit their initial BOI report, but that deadline is currently on hold. Companies can voluntarily submit the information or choose to hold the reporting until the court cases are resolved.
 

What entities would be required to comply with the CTA’s BOI reporting requirement?
 

Entities organized both in the U.S. and outside the U.S. may be subject to the CTA’s reporting requirements. Domestic companies required to report include corporations, limited liability companies (LLCs) or any similar entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe.
 

Domestic entities that are not created by the filing of a document with a secretary of state or similar office are not required to report under the CTA.
 

Foreign companies required to report under the CTA include corporations, LLCs or any similar entity that is formed under the law of a foreign country and registered to do business in any state or tribal jurisdiction by filing a document with a secretary of state or any similar office.
 

Would there be exemptions from the filing requirements?
 

There are 23 categories of exemptions. Included in the exemptions list are publicly traded companies, banks and credit unions, securities brokers/dealers, public accounting firms, tax-exempt entities and certain inactive entities, among others. Please note these are not blanket exemptions and many of these entities are already heavily regulated by the government and thus already disclose their BOI to a government authority.
 

In addition, certain “large operating entities” are exempt from filing. To qualify for this exemption, the company must: 

1. Employ more than 20 people in the U.S.;
2. Have reported gross revenue (or sales) of over $5M on the prior year’s tax return; and
3. Be physically present in the U.S.

Who is a beneficial owner?
 

Any individual who, directly or indirectly, either: 

• Exercises “substantial control” over a reporting company, or
• Owns or controls at least 25 percent of the ownership interests of a reporting company

An individual has substantial control of a reporting company if they direct, determine or exercise substantial influence over important decisions of the reporting company. This includes any senior officers of the reporting company, regardless of formal title or if they have no ownership interest in the reporting company.
 

The detailed CTA regulations define the terms "substantial control" and "ownership interest" further.
 

What sort of information would be required to be reported?
 

Companies must report the following information: full name of the reporting company, any trade name or doing business as (DBA) name, business address, state or Tribal jurisdiction of formation, and an IRS taxpayer identification number (TIN).
 

Additionally, information on the beneficial owners of the entity and for newly created entities, the company applicants of the entity is required. This information includes — name, birthdate, address, and unique identifying number and issuing jurisdiction from an acceptable identification document (e.g., a driver’s license or passport) and an image of such document.

BOI Reporting Update

As of 12/27/24:

On December 23, 2024, a panel of the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction entered in the case of Texas Top Cop Shop, Inc. v. Garland, pending the outcome of the Department of the Treasury’s ongoing appeal of the district court’s order. FinCEN immediately issued an alert notifying the public of this ruling, and recognizing that reporting companies may have needed additional time to comply with beneficial ownership reporting requirements, FinCEN extended reporting deadlines. On December 26, 2024, however, a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the Court’s December 23, 2024 order granting a stay of the preliminary injunction. Accordingly, as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. v. Garland is in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN.

Alert: Updates to Beneficial Ownership Information Reporting Deadlines – Beneficial Ownership Information Reporting Requirements Now in Effect, with Deadline Extensions

In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline as follows:

• Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)

On Tuesday, December 3, 2024, a federal district court in Texas issued an order granting a nationwide, preliminary injunction that: (1) enjoins enforcement of the Corporate Transparency Act (CTA) and regulations implementing its beneficial ownership information (BOI) reporting requirements, and (2) stays all deadlines to comply with the CTA’s reporting requirements, including the January 1, 2025 deadline for reporting companies to submit their initial BOI report. The Department of Justice, on behalf of the Department of the Treasury, filed an appeal of the district court’s decision on December 5, 2024.

The Financial Crimes Enforcement Network (FinCEN) has respondedthat as long as the preliminary injunction remains in effect:

• reporting companies are not required to report BOI to FinCEN; and
• reporting companies will not be subject to liability for failing to report their BOI.

FinCEN also indicated that reporting companies may continue to voluntarily submit BOI reports.

What this means:

The future of the CTA and BOI reporting, including when reports need to be submitted, remains fluid and unpredictable. While the Texas district court’s ruling may be the most recent decision issued, it is not the only case in which the CTA has been challenged. Federal district court decisions on the validity of the CTA have conflicted, and three district court cases are currently being appealed to their respective Courts of Appeals. As such, it is strongly advised that CPA firms continue to closely monitor developments and be prepared to respond swiftly if necessary.

Check the FinCEN Beneficial Ownership Information Reportingpage and the AICPA beneficial ownership information (BOI) reporting page for more.
 

BOI Background Information:

The Corporate Transparency Act (“CTA) was enacted into law as part of the National Defense Act for Fiscal Year 2021. The CTA requires the disclosure of the Beneficial Ownership Information (otherwise known as “BOI”) of certain entities from people who own or control a company.
 

Prior to the injunction, there was a January 1, 2025 deadline for reporting companies to submit their initial BOI report, but that deadline is currently on hold. Companies can voluntarily submit the information or choose to hold the reporting until the court cases are resolved.
 

What entities would be required to comply with the CTA’s BOI reporting requirement?
 

Entities organized both in the U.S. and outside the U.S. may be subject to the CTA’s reporting requirements. Domestic companies required to report include corporations, limited liability companies (LLCs) or any similar entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe.
 

Domestic entities that are not created by the filing of a document with a secretary of state or similar office are not required to report under the CTA.
 

Foreign companies required to report under the CTA include corporations, LLCs or any similar entity that is formed under the law of a foreign country and registered to do business in any state or tribal jurisdiction by filing a document with a secretary of state or any similar office.
 

Would there be exemptions from the filing requirements?
 

There are 23 categories of exemptions. Included in the exemptions list are publicly traded companies, banks and credit unions, securities brokers/dealers, public accounting firms, tax-exempt entities and certain inactive entities, among others. Please note these are not blanket exemptions and many of these entities are already heavily regulated by the government and thus already disclose their BOI to a government authority.
 

In addition, certain “large operating entities” are exempt from filing. To qualify for this exemption, the company must: 

1. Employ more than 20 people in the U.S.;
2. Have reported gross revenue (or sales) of over $5M on the prior year’s tax return; and
3. Be physically present in the U.S.

Who is a beneficial owner?
 

Any individual who, directly or indirectly, either: 

• Exercises “substantial control” over a reporting company, or
• Owns or controls at least 25 percent of the ownership interests of a reporting company

An individual has substantial control of a reporting company if they direct, determine or exercise substantial influence over important decisions of the reporting company. This includes any senior officers of the reporting company, regardless of formal title or if they have no ownership interest in the reporting company.
 

The detailed CTA regulations define the terms "substantial control" and "ownership interest" further.
 

What sort of information would be required to be reported?
 

Companies must report the following information: full name of the reporting company, any trade name or doing business as (DBA) name, business address, state or Tribal jurisdiction of formation, and an IRS taxpayer identification number (TIN).
 

Additionally, information on the beneficial owners of the entity and for newly created entities, the company applicants of the entity is required. This information includes — name, birthdate, address, and unique identifying number and issuing jurisdiction from an acceptable identification document (e.g., a driver’s license or passport) and an image of such document.