Legislative Update: Federal Court in the Eastern District of Texas Issues Order Enjoining Federal Government Enforcement of Beneficial Ownership Information Filing Requirement under CTA

What follows does not constitute legal or tax advice. Consult with a competent professional for guidance.

On December 3, the District Court for the Eastern District of Texas granted a national injunction enjoining the government from enforcing the CTA and expressly stating that companies “need not comply with the CTA’s January 1, 2025 BOI reporting deadline pending further order of the Court.”    The government is expected to appeal and request the order be stayed pending the outcome of the appeal.  We have been advised that, at this point, companies should consult with legal counsel regarding their filing obligations and compliance with the CTA January 1, 2025, deadline in the event there is an appeal and the decision is stayed.

If your business is a corporate entity/LLC, etc. the deadline for filing under the requirements of the Corporate Transparency Act is stated as January 1, 2025 in the statute.

Penalties for non-compliance are set as high as $500 per day. There are some exemptions relating to non-profits, etc. However, you will want to check with pertinent professionals as to whether your entity is subject to the Beneficial Ownership Information filing requirement.

The webpage for the Financial Crimes Enforcement Network, which has helpful information is as follows: https://fincen.gov/boi