It's been a wild month for the Corporate Transparency Act (CTA) but as of today, the injunction against the beneficial ownership information (BOI) reporting requirement is back in place.
The reversal on the injunction comes after the Fifth Circuit Court of Appeals, i.e., the same appellate court that recently vacated the injunction, ordered the injunction to be put back in place "in order to preserve the constitutional status quo" during the appeals process. Tex. Top Cop Shop, Inc. v. Garland, 2024 U.S. App. LEXIS 32702 (5th Cir., Dec. 26, 2024). The Court noted that the review was expedited, so business owners should continue to monitor litigation on the CTA. The Financial Crimes Enforcement Network (FinCEN), the enforcement agency for the CTA, posted a notice on their website stating that they would pause enforcement of BOI reporting requirements until the injunction was lifted.
Timeline of Events
January 1, 2024: The Corporate Transparency Act (CTA) goes into effect. Under the CTA, certain business entities, including LLCs, are required to file beneficial ownership information (BOI) reports with FinCEN. For entities created before January 1, 2024, the deadline is January 1, 2025. For entities created after January 1, 2024, the entity has 30 days after its creation to file the BOI report. The BOI reporting requirement extends to dissolved entities under certain circumstances.
December 3, 2024: The District Court for the Eastern Division of Texas grants a nationwide preliminary injunction against FinCEN's enforcement of BOI reporting requirements. Texas Top Cop Shop, Inc., et al. v. Garland, et al., Case No 4:24-cv-478 (E.D. Tex.).
December 23, 2024: FinCEN's appeal to stay the preliminary injunction is granted by the Fifth Circuit Court of Appeals, thereby reinstating the BOI reporting requirements. FinCEN extends the filing deadline to January 13, 2025.
December 26, 2024: The Fifth Circuit Court of Appeals reinstates the nationwide injunction, thereby preventing enforcement of BOI reporting requirements across the nation. Tex. Top Cop Shop, Inc. v. Garland, 2024 U.S. App. LEXIS 32702 (5th Cir., Dec. 26, 2024).
