Earlier this week, a U.S. District Court for the Eastern District of Texas effectively rescinded the injunction it had placed on the enforcement of the Corporate Transparency Act (CTA). Shortly thereafter, the US Treasury Department's Financial Crimes Enforcement Network (FinCEN) issued the following alert:
'With 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., beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again back in effect. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply with their BOI reporting obligations, FinCEN is generally extending the deadline 30 calendar days from February 19, 2025, for most companies.
Notably, in keeping with Treasury's commitment to reducing regulatory burden on businesses, during this 30-day period FinCEN will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks.
FinCEN also 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.
Updated Deadlines:
- For the vast majority of reporting companies, the new deadline to file an initial, updated, and/or corrected BOI report is now March 21, 2025. FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.
- Reporting companies that were previously given a reporting deadline later than the March 21, 2025 deadline must file their initial BOI report by that later deadline. For example, if a company's reporting deadline is in April 2025 because it qualifies for certain disaster relief extensions, it should follow the April deadline, not the March deadline.'
In light of these developments, companies should continue preparations to comply with the CTA by the new March 21, 2025 deadline. It is not known at this time whether Congress may act to delay the deadline or otherwise intervene in the applicability of the CTA.
Congress passed the CTA as part of an anti-money laundering package in the 2021 National Defense Authorization Act, with the aim of curbing illicit financial activities, like tax evasion, money laundering, drug trafficking and terrorist financing. As described in our prior newsletters on December 8, 2024, December 23, 2024, December 29, 2024 and January 30, 2025, under the CTA, many corporations, limited liability companies, limited partnerships and similar legal entities are required to report ownership and management information (known as beneficial ownership information, or BOI) to FinCEN.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
