TMA Accounting
The Corporate Transparency Act (CTA) brought new requirements for businesses to report Beneficial Ownership Information (BOI) to the feds. However, a recent court decision has put a hold on enforcement, creating uncertainty for businesses. Here’s the latest update on what this means for you and your business, as well as practical steps to prepare.
The Basics of BOI Filing
The CTA requires most businesses in the United States to report details about their owners and officers to the Financial Crimes Enforcement Network (FinCEN). This includes information like full legal names, dates of birth, residential addresses, and identifying document details. Reporting deadlines depend on when the business entity was created:
- Existing businesses (formed before Jan. 1, 2024): Required to file by Jan. 1, 2025.
- New businesses (formed in 2024): Must file within 90 days of creation.
- New businesses (formed after Jan. 1, 2025): Must file within 30 days of creation.
Our recent article with more resources and details about BOI filing can be found here.
Recent Court Developments: What's Changed?
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide injunction, halting the enforcement of BOI filing requirements. The court found that the CTA’s reporting rules are likely unconstitutional, but this is only a preliminary ruling. The Department of Justice has already filed an appeal, and the future of the filing deadlines remains uncertain.
FinCEN has clarified that reporting is voluntary during the injunction but has warned businesses to stay prepared for potential changes.
What Should You Do Next?
1. Don't Panic - Stay Informed
The situation is still evolving. Follow updates from FinCEN and professional organizations.
2. Prepare Your BOI Information
Even if you don’t file yet, gather the required information now. This will save time and stress if filing deadlines are reinstated.
3. Consult Your Legal Advisor
There may be legal implications to be considered as you decide how to proceed with the BOI filing requirements. Legal aspects of BOI filing are generally beyond the scope of traditional accounting and tax preparation/filing services.
4. Make a Filing Plan
Consider these three options:
- File voluntarily now if you’re ready and want peace of mind.
- Prepare your filing now, but hold off on the actual filing until deadlines are reinstated.
- Wait for further clarity, but stay prepared to act quickly if deadlines return.
Looking Ahead
While the courts debate the CTA, it’s clear that BOI reporting isn’t going away entirely. The goal of these regulations—to combat financial crimes like money laundering—is widely supported, and most businesses will likely be required to comply eventually.
As this is an evolving situation, we recommend that business owners monitor developments. Proactive preparation will help protect your business from penalties and last-minute surprises.
TMA helps navigate what can seem like unending compliance challenges. Stay tuned for updates, and don’t hesitate to reach out with questions.
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