Beneficial Ownership Information, or BOI reports, are now voluntary until further notice. However, Grobstein Teeple still recommends clients gather relevant information and be ready to file should the situation change before January 1. 

The Corporate Transparency Act (CTA) of 2021—which requires businesses to report beneficial ownership information to combat crimes perpetrated through shell companies—has been making headlines across the country.

That’s because a recent federal court order has declared reporting companies are not currently required to file beneficial ownership reports with FinCEN, and will not subject to liability if they fail to do so, while the order remains in force.

Nevertheless, Ken Solares, Senior Tax Manager with Grobstein Teeple, says clients should still be prepared to file BOIs regardless of the court order—which came about after a federal court in Texas temporarily blocked the Treasury Department from enforcing BOI reporting rules.

“Our advice to clients is to gather your information and be ready to file,” Solares said.

“That’s because the original ruling has been appealed and it is possible the temporary injunction is lifted before the January 1, 2025 deadline.” 

That means clients should still be ready to file or determine if their businesses are exempt—in time for that January 1 deadline—because the federal government’s appeal means enforcement could swiftly resume.

The court ruling on Texas Top Cop Shop, Inc. v. Garland found that CTA enforcement was likely unconstitutional—prompting a response from FinCEN.

“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, reads the response on the FinCEN website.

“While this litigation is ongoing, FinCEN will comply with the order issued by the U.S. District Court for the Eastern District of Texas for as long as it remains in effect.”

For anyone unaware of their reporting requirements, unless they are exempt, businesses must report information about their beneficial owners—including name, address, SSN, and birth date, as well as other verifiable personal data.

Companies founded before 2024 must report by January 1, 2025, while those formed in 2024 have just 90 calendar days from their foundation date to comply.

Compliance to date is reportedly low, with millions of business owners seemingly unaware of their requirement to file. 

FinCEN has said reporting companies will not be subject to liability while the injunction is in place but will still accept voluntary contributions of BOI reports before the January 1 deadline.

If you are interested in filing, we ask that you contact us at your earliest convenience.