Last Updated: February 19th, 2025
Beneficial Ownership Information Reporting (BOIR) the Corporate Transparency Act (CTA) IS NO LONGER SUSPENDED by Court Order, but Trump Administration says it will ONLY ENFORCE AGAINST FOREIGN REPORTING COMPANIES
On March 2nd, 2025, the US Treasury Department announced, using imprecise grammar that can only suggest this was not clearly thought out, that “not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either.“
Taken literally, it means the Trump Administration is not following statute, and telling the world that it will not enforce penalties or fines as against US citizens or domestic reporting entities, although foreign entities doing business in the US will be fined if they don’t follow the law.
While this announcement also says, “[t]he Treasury Department will further be issuing a proposed rulemaking (sic) that will narrow the scope of the rule to foreign reporting companies only,” such a statement doesn’t mean US citizens and domestic reporting companies do not have to report. Even if the Treasury Department does issue a revised rule stating exactly that, such a rule could not override Congressional statute, therefore leaving businesses who are following a revised rule (but not Congressional statute) potentially liable in a lawsuit where the other party claims invalid or missing information in the BOIR database.
We’re in uncharted waters here, and this means risk for small business. Our recommendation is to report, and follow the law.
Here’s a very brief overview of the cases that have impacted the BOIR deadline (in reverse chronology):
On February 18th, 2025, a 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, cleared the way for FinCEN to again start enforcing BOIR under the CTA. FinCEN granted businesses 30 days to get back with the program, extending the deadline to March 21st, 2025, for most companies.As of February 18th, a 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, clears the way for FinCEN to again start enforcing BOIR under the CTA. FinCEN has granted businesses 30 days to get back with the program, extending the deadline to March 21st for most companies.
On January 23, 2025, the United States Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). However, a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, therefore reporting companies are still not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
On December 27th, 2024, FinCEN was again enjoined (i.e. restrained) from enforcing Beneficial Ownership Information Reporting (BOIR) under the Corporate Transparency Act (CTA). Specifically, the Fifth Circuit, United States Court of Appeals, vacated (i.e. reversed) its previous order of December 23rd, granting the US Government’s emergency motion to stay the lower court’s order to enjoin FinCEN from enforcing BOIR under the CTA. Text of this new order can be found here.
On December 23rd, 2024, the injunction on FinCEN from enforcing Beneficial Ownership Information Reporting (BOIR) under the Corporate Transparency Act (CTA) was lifted by the Fifth Circuit, United States Court of Appeals, which had granted the US Government’s emergency motion to stay the lower court’s order to enjoin FinCEN from enforcing BOIR under the CTA. Text of the opinion can be found here. FinCEN then revised its deadlines, moving the big deadline of January 1st, 2025, to January 13th, 2025. This stay is rescinded as of 12/27/2024.
On December 3rd, 2024, the US District Court for the Eastern District of Texas, see Texas Top Cop Shop, Inc. v. Garland, E.D. Tex., No. 4:24-cv-00478, 12/3/24, issued an order enjoining (i.e. restraining) FinCEN from enforcing BOIR under the CTA. This order has been stayed by the Court of Appeals (5th Circuit), although the Appeals Court has yet to rule specifically on the merits of the Dist. Ct. case.
*** OUR CURRENT RECOMMENDATION: Foreign-based entities operating in the US must report. US citizens and domestic reporting entities should, as a matter of “best practice,” file their report. This is the only sure-fire way to avoid future liability with a new administration or in a lawsuit against a determined opponent.
L4SB can keep you appraised of changes in the law with our BOIR Compliance Package that starts at $4.95/month.
What is BOIR Under the CTA?
The CTA is an Act passed by Congress requiring almost all businesses in the US to report Beneficial Ownership Information (not just “ownership information”, but “beneficial ownership information”). It is enforced by FinCEN.gov, as of 1/1/2024, requiring all companies to submit an initial BOIR (stands for “Beneficial Ownership Information Report”) no later than 1/1/2025 (this has been moved to 3/20/2025) for companies existing prior to 1/1/2024, and all new companies to submit within 90-days of forming in 2024, and 30-days of forming in 2025 and onward.
The Latest Deadlines
As of February 18th, 2025, all pre-existing companies must file no later than March 21st, 2025, and all new companies must file within 30-days of filing (or March 21st, 2025, whichever occurs latest).
We wrote a comprehensive article about BOIR.
The penalties for either not reporting or reporting false or incomplete information is very stiff. Criminal sanctions of up to $10,000 and 2 years in jail. Civil penalties of up to $500/day.
What Services Does L4SB Provide for BOIR Compliance?
We are a leading institution for BOIR Compliance, and we provide some of the most advanced and sophisticated tools available to deal with this annoying legal requirement (now currently suspended, although we suspect it will be put back into place).
- Want to talk to an attorney about BOIR Compliance? We sell 30-minute BOIR attorney consult.
- Want help submitted an initial or updated BOIR? For a nominal fee we can file the report for you.
- Don’t want to worry about BOIR Compliance? We offer a BOIR Compliance Service for as low as $4.95/month.
- Not sure whether (1) you need to report, or (2) who your “beneficial owners” are? We wrote a FREE, anonymous, expert system to give you an opinion on this. It will generate a report of its analysis, so you can take it to your business attorney to verify.
Not sure what sort of help you need? Search for something at the top of our website, or contact us, and we’ll do our best to answer your question or push you in the right direction to get help or answers.
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