The Financial Crimes Enforcement Network (FinCEN) issued a notice confirming that beneficial ownership information (BOI) reporting rules are back in effect following a February 18, 2025, ruling in Smith, et al. v. U.S. Department of the Treasury, et al. in the Eastern District of Texas. The Smith Court lifted its injunction following the January 23, 2025, Supreme Court decision in Texas Top Cop Shop, Inc., et al. v. Garland, et al., which we discussed in a previous alert.
For most reporting companies,[1] the deadline to file a new, updated, or corrected BOI report is now March 21, 2025. However, FinCEN’s notice states that the agency will use the 30-day period before the deadline to “assess its options to further modify deadlines, while prioritizing reporting for those entities that post the most significant security risks.” According to the notice, FinCEN may also work toward revising the BOI reporting rules to “reduce the burden for lower-risk entities.”
Recent legislation unanimously passed in the U.S. House of Representatives exacerbates the lack of certainty around the new deadline. H.R. 736, Protect Small Businesses From Excessive Paperwork Act of 2025, which is now before the Senate, would extend the deadline for filing BOI reports to January 1, 2026, for companies formed before January 1, 2024.
The Corporate Transparency Act (CTA) contains civil and criminal penalties for noncompliance. Reporting companies that take a “wait and see” approach between now and March 21, 2025, should be prepared to file quickly as the deadline approaches. Given the compressed timeframe and the single deadline for the vast majority of companies, there may be a significant demand on FinCEN’s online portal as we approach March 21.
CTA in the Courts
For those keeping score on the CTA litigation front, both cases mentioned above are currently pending in the U.S. Court of Appeals for the Fifth Circuit, with oral arguments scheduled in Texas Top Cop Shop for April 1, 2025. Other cases on appeal to circuit courts include:
- National Small Business United v. Yellen — The U.S. District Court for the Northern District of Alabama issued an injunction preventing enforcement of the CTA against the named plaintiffs. Oral arguments were held on September 27, 2024, in the government’s appeal to the U.S. Court of Appeals for the Eleventh Circuit. No decision has been issued.
- Firestone et al v. Yellen et al. — The U.S. District Court for the District of Oregon denied the plaintiffs’ request for a preliminary injunction, and the plaintiffs appealed the decision to the U.S. Court of Appeals for the Ninth Circuit.
- Community Associations Institute et al v. U.S. Department of the Treasury et al. — The U.S. District Court for the Eastern District of Virginia denied the plaintiffs’ request for a preliminary injunction, and the plaintiffs appealed the decision to the U.S. Court of Appeals for the Fourth Circuit.
In a noteworthy decision on February 14, 2025, in Boyle v. Bessent, et al., the U.S. District Court for the District of Maine granted the government’s motion for summary judgment, finding the CTA to be a valid exercise of congressional authority.
We will continue to monitor this situation closely and provide updates as needed.
ENDNOTES
[1] Companies that were previously granted an extended deadline later than March 21, 2025, must file by such later deadline. In addition, the injunction in favor of the plaintiffs in National Small Business United v. Yellen remains unaffected by the latest ruling. Companies formed after February 19, 2025, must file within 30 days of formation.