After our most recent bulletin, the Department of Treasury’s FinCEN issued a notice providing some clarity regarding the deadline for filing reports (BOIRs) under the Corporate Transparency Act (CTA). FinCEN’s notice is in response to a Texas court issuing a preliminary injunction that stayed the January 1, 2025 deadline for filing BOIRs, and made the injunction applicable nationwide. Texas Top Cop Shop, Inc. v. Garland, No. 4:24-cv-478 (E.D. Tex.). FinCEN’s notice indicated that companies are not required to file their BOIRs while the Texas preliminary injunction remains in effect. FinCEN advised that reporting companies may continue to voluntarily submit reports if they choose, but will not be subject to liability if they fail to do so at this time.
We anticipate that FinCEN will appeal the Texas decision, and ask the Texas court to stay the preliminary injunction pending appeal, or narrow its application to only the litigants in the case. However, because FinCEN has formally announced that reporting companies are not currently required to file BOIRs, we believe it is most likely that FinCEN will provide a new deadline if it becomes clear that BOIRs are again required. It is unclear how much time FinCEN would allow for BOIR filings if the preliminary injunction is lifted or narrowed, so it is still prudent for companies to do the background work necessary to be ready to file their BOIRs.
We will follow up with additional guidance if this injunction is lifted and/or if there are any further developments regarding this issue. If you have questions arising out of the CTA and/or of the preliminary injunction, please feel free to contact Randolph McCalla or Audrey Baker in our corporate practice group.
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