In a previous post, Analytics described the reporting requirements of the Corporate Transparency Act (“CTA”). In brief, the Corporate Transparency Act created new reporting requirements for companies regarding their Beneficial Owner Information (“BOI”) to the Financial Crimes Enforcement Network (“FinCEN”), a bureau within the US Department of Treasury.
Recent Happenings
On December 3, the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction against enforcement of the Corporate Transparency Act’s reporting requirements. This ruling was based on the Court’s assessment that the Corporate Transparency Act is likely unconstitutional. Since the Beneficial Owner Information requirement is directly tied to the Corporate Transparency Act, it was also deemed likely unconstitutional. As a result, the Court’s order temporarily halted enforcement of the Beneficial Ownership Information reporting requirements.
The Department of Justice has filed an appeal, and the case is under review. But for now, FinCEN has stopped its enforcement of the Corporate Transparency Act. Companies should be still be prepared to comply with the Corporate Transparency Act in case the Court decides to reverse course.