Ongoing Litigation Creates Confusion Over CTA BOI Reporting

Are certain businesses still required to file a Beneficial Ownership Information Report (BOIR) under the Corporate Transparency Act (CTA) with FinCEN?

If you’re a reporting company subject to the Corporate Transparency Act and haven’t filed a BOIR, your head may be spinning (and you’re probably not alone).

A litany of litigation and conflicting federal court rulings (including a ruling in December by the Fifth Circuit Court of Appeals lifting the nationwide injunction against the CTA only to reverse its decision a few days later and most recently, the Supreme Court siding with the government in issuing a stay of the nationwide injunction issued by one federal judge in Texas while a nationwide injunction issued by a different federal judge in Texas remains in effect) has created ongoing confusion over the CTA’s BOI reporting requirements.

For now, reporting companies are not required to file a BOIR with FinCEN and will not face penalties for failing to file while a nationwide injunction remains in effect. However, reporting companies may continue to voluntarily submit their BOIRs to FinCEN.

Due to the continued uncertainty, reporting companies that have not filed their BOIRs and have opted not to submit BOIRs voluntarily should continue to compile the requisite information and stay up to date on CTA / BOIR guidance from FinCEN.

For more information on the CTA / BOIR requirements, businesses should visit FinCEN’s website at https://www.fincen.gov/boi and consult with their general counsel, if necessary.