On February 19, 2025, FinCEN announced on its website that the Corporate Transparency Act (CTA) beneficial ownership information (BOI) reporting requirements are back in effect, with an extended filing deadline of March 21, 2025, for most reporting companies. In addition to the headline-worthy action of placing BOI reporting requirements back in place (with an extended deadline), the FinCEN announcement is noteworthy for suggesting that it may change future filing deadlines or potentially reduce the paperwork for undefined "lower-risk entities."
According to the FinCEN announcement:
- 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, 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 keeping with the U.S. Department of Treasury's commitment to reducing regulatory burdens on businesses, during the next 30 days, 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 the burden for lower-risk entities, including many U.S. small businesses.
The full text of the February 19 FinCEN announcement is available on its website.
FinCEN's announcement follows the court order issued on February 17, 2025, in Smith, et. al v. U.S. Department of the Treasury, et. al, 6:24-cv-336 (E.D. Tex.). Citing the U.S. Supreme Court's order allowing enforcement of the CTA in the McHenry v. Texas Top Cop Shop, Inc., the Smith court granted the Treasury Department's motion seeking to stay the court's prior injunction of certain aspects of the CTA in the Smith case. In effect, the Smith court order reactivates the CTA reporting requirements while the appeal in the case is pending before the Fifth Circuit Court of Appeals.
There are a variety of cases challenging the constitutionality of the CTA that are pending before numerous courts throughout the country, including the Fifth Circuit in the Texas Top Shop case and in the Smith case. Congress seems to be focused on the CTA as well. On February 10, 2025, the U.S. House of Representatives unanimously passed the Protect Small Businesses from Excessive Paperwork Act of 2025, which would extend the initial reporting deadline for reporting companies formed prior to 2024 to not later than January 1, 2026. A companion bill was introduced in the Senate on February 12. That bill was referred to the Senate Banking, Housing and Urban Affairs Committee.
Given the impending March 21, 2025, FinCEN BOI reporting deadline and the current uncertainty in the courts and Congress of the potential impact of this filing deadline, reporting companies would be well-advised to closely monitor CTA developments and immediately (re)start preparing their BOI reports to be filed with FinCEN by the March 21, 2025, deadline, unless the company otherwise qualifies for one of the 23 CTA filing exemptions.
For More Information
If you have any questions about this Alert, please contact Thomas R. Schmuhl, Jocelyn Margolin Borowsky, Joel N. Ephross, Hope P. Krebs, Lee J. Potter Jr., any of the attorneys in our Corporate Transparency Act Group, the attorney in the firm with whom you are regularly in contact, or Michael A. Gillen or any of the professionals in the Tax Accounting Group.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
