BOI REPORTING UNDER CTA ACTIVE BUT NOT BEING FULLY ENFORCED FinCEN CURRENTLY IN DAMAGE CONTROL MODE

Updated March 12, 2025
James T. Walther, Esq., LL.M.
General Counsel

This News Alert is an update to our prior articles on the Corporate Transparency Act (CTA) and its BOI reporting requirements, linked below at the end of the article. As the legal landscape around BOI reporting the Corporate Transparency Act continues to shift, business owners must stay informed about the latest enforcement updates and upcoming deadlines.

Throughout the past year, there has been contentious litigation surrounding the enforceability of the Corporate Transparency Act including pending cases in multiple jurisdictions. During the past six months, the litigation and legal challenges to the injunctions created an on again off again effect for reporting requirements. The back and forth has created mass confusion among business owners and made us consider a CTA on / off redlight green light feature on our webpage.

In two leading cases being litigated in the 5^th Circuit the Court had issued injunctions which stayed the Treasury’s ability to enforce the CTAs mandatory BOI reporting requirements. Recently, FinCEN achieved victories in the US Supreme Court[i] and in the 5^th Circuit[ii], which lifted injunctions holding back FinCEN from enforcing reporting. Although no decisions have been rendered on the merits of the CTA in any Court, the reporting requirements can legally be enforced for the time being.

In response to the 5^th Circuit lifting these injunctions, FinCEN promptly issued a notice, FIN-2025-CTA1 (February 18, 2025) which announced the new effective date for reporting companies to file BOI reports. It also stated that FinCEN is looking into revising the reporting rules. Subsequently, on February 27, 2025, FinCEN issued a notice rolling back the new enforcement date stating in pertinent parts that:

• “will not issue not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines.” 
• “No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity as quickly as possible, while ensuring that BOI that is highly useful to important national security, intelligence, and law enforcement activities is reported.”
• “FinCEN also intends to solicit public comment on potential revisions to existing BOI reporting requirements. FinCEN will consider those comments as part of a notice of proposed rulemaking anticipated to be issued later this year to minimize burden on small businesses while ensuring that BOI is highly useful to important national security, intelligence, and law enforcement activities, as well to determine what, if any, modifications to the deadlines referenced here should be considered.”

Current official statements from FinCEN can be found on FinCEN’s official website.  We highly recommend that professionals and business owners monitor any new developments directly through FinCEN as our articles may not reflect the most up to date requirements.

For additional background information, please read our previous articles:
December 13, 2024 – CTA enforcement stay reinstated

December 30, 2024 – CTA enforcement initially stayed by Court

Still a little confused? So are we.

We drew up this Timeline of relevant events in the CTA saga:

January 1, 2024, BOI goes into effect. Reporting mandatory.

December 3, 2024, BOI stayed by 5th Cir Court injunction in Texas Top Cop v. Garland. Reporting voluntary.

December 23, 2024, BOI stay lifted by Appeals Panel. Reporting mandatory. See here.

December 26, 2024, BOI stayed by different Appeals Panel, injunction is back. Reporting voluntary. See here.

January 23-24, 2025, BOI currently still voluntary. US Supreme Court Stays injunction in Texas Top Cop, permitting FinCEN to enforce BOI. FinCEN announces it is waiting for decisions on other pending challenges to enforcement.

February 14, 2025, a U.S. District Court in Boyle v. Scott Bessent, granted the DOJ’s motion for summary judgment in that case.

February 17, 2025, Court decision in Smith v. US Treasury lifts preliminary injunction in that case.

February 19, 2025, The FinCEN BOI reporting requirements are back in effect as per an official notice, FIN-2025-CTA1 (February 18, 2025). Reports due March 21, 2025.

February 27, 2025, FinCEN website announcement that they will not issue fines or penalties in connection with BOI information reporting deadlines.

Prior to March 21, 2025, FinCEN to issue Final Interim Rule on enforcement and key dates.

[i] McHenry v. Texas Top Cop Shop, Inc. (formerly captioned Garland v. Texas Top Cop Shop, Inc.), No. 24A653, 2025 WL 272062 (U.S. Jan. 23, 2025).

[ii] Smith, et al. v. U.S. Department of the Treasury, et al., 6-24-cv-00336 (E.D. Tex.).

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