Here is an update on the pending Beneficial Owner Information “BOI” reporting requirements.

On December 3rd, United States District Court for the Eastern District of Texas issued a nationwide preliminary injunction in favor of the plaintiffs, Texas Top Cop Shop, Inc., et al. v. Garland, et al, which states that reporting companies need not comply with the CTA’s January 1, 2025 Beneficial Owner

Information “BOI” reporting deadline pending further order of the Court. The Court didn’t rule on the constitutionality of the CTA, but did state the CTA is likely unconstitutionally outside of Congress’s power.

Late in the day on December 5, 2024, the U.S. government filed an appeal to the United States Court of Appeals for the Fifth Circuit against this preliminary injunction. As a result the following FINCEN states on their own website, “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. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”

On December 13th, the U.S. Department of Justice filed an emergency motion with the Fifth Circuit Court of Appeals requesting that the nationwide preliminary injunction enjoining enforcement of the Corporate Transparency Act “CTA” be put aside while the federal appeals court considers the DOJ’s December 5th appeal of the nationwide injunction. The Court has accelerated the briefing schedule for its decision which could be made by the end of the week.

What does this mean:

• Court might grant the motion to stay and the filing deadline might be restored to December 31, 2024 with penalties;
• Court grants a partial motion to only staying the nationwide application of the injunction; or
• Court denies the motion for stay entirely and the preliminary injunction will remaining in place until the outcome of the DOJ’s December 5th is heard.

Because of the uncertainty and timeliness of the ruling, reporting companies should continue to prepare to comply with the BOI reporting requirement by the original January 1st deadline.

We are monitoring the situation and any updates will be posted on our website.

Please contact your Polk & Associates representative if you have any questions.

Polk & Associates

Large enough to serve a diverse clientele, yet small enough to maintain a hands-on approach, we are committed to maintaining the highest accounting and ethical standards with continuous education, extensive research resources, and excellent quality control.

Polk and Associates is a member of the Michigan Association of Certified Public Accountants, and the American Institute of Certified Public Accountants. The firm participates in the AICPA Peer Review Program, and has always received the highest level of award for its audit practice and quality control.