***FINCEN HAS EXTENDED THE COMPLIANCE DEADLINE FROM JANUARY 1 to JANUARY 13***
Today, the Fifth Circuit Court of Appeals stayed the decision of the Texas district court that had ordered a nation-wide injunction of the Corporate Transparency Act (CTA) earlier this month. The result of the Fifth Circuit’s decision is that the Financial Crimes Enforcement Network (FinCEN) can enforce the CTA. Therefore, companies seeking to comply with the CTA have until Jan. 13, 2025, to file their beneficial ownership report with FinCEN through its Beneficial Owner Information (BOI) interface at https://boiefiling.fincen.gov/.
The Fifth Circuit’s decision is likely to catch many businesses off guard, as the potential for the Fifth Circuit to act has not been widely reported. The Fifth Circuit’s decision also comes after the lower court denied a motion to stay the injunction late last week.
We are still waiting for FinCEN to react to the decision and provide instructions for compliance. However, FinCEN’s prior notice about CTA compliance being “voluntary” was clear that such “voluntary” reporting was only applicable “so long as the [injunction] remains in force.” With the injunction lifted, reporting is now mandatory again under the CTA.
Absent action from the Supreme Court, we do not anticipate any change in the reporting environment until after Dec. 31. The tone of the Fifth Circuit’s decision also indicates that it is unlikely that the Fifth Circuit will find the CTA unconstitutional or reinstate the injunction.
The CTA requires that all entities organized or registered to do business in the United States identify their beneficial owners to FinCEN by Jan. 13, 2025, subject to several exemptions.
If you have previously engaged Parsons to assist with your FinCEN filings, we will proceed as outlined in our original engagement. To engage Parsons to assist in compliance, please reach out quickly to the attorney you routinely work with, or, if you would like to contact the CTA team directly, call (406) 317-7220 or send an email to cta@parsonsbehle.com.
