Beneficial Ownership Reporting Back On, FinCEN Announces New Deadline
After a second Texas federal district court lifted a pause on the Corporate Transparency Act's beneficial ownership information reporting requirements, Treasury's Financial Crimes Enforcement Network (FinCEN) has set a new deadline for existing entity reports. (Smith v. Treasury, (DC TX, 2/17/2025) 135 AFTR 2d ¶2025-404)
The February 17 district court order in Smith cites the U.S. Supreme Court's January ruling in another case out of Texas where a nationwide injunction had been granted. (McHenry v. Texas Top Cop Shop, (S Ct, 1/23/2025) 135 AFTR 2d 2025-462 ) The Supreme Court found in Texas Top Cop Shop that the reporting requirements should still be enforced while an appeal of the underlying law is pending.
After the Supreme Court stayed the injunction in Texas Top Cop Shop, FinCEN took the position that reporting entities did not yet have to file beneficial ownership information. The reason, FinCEN announced on its website last month, was a second nationwide injunction in Smith.
New deadlines announced. With both injunctions now stayed, FinCEN said on February 19 that beneficial ownership information filings are no longer voluntary. See FinCEN memo here.
For entities in existence before January 1, 2024, reports generally must be filed by March 21, 2025.
Exceptions apply for certain entities that previously had a reporting deadline later than the March 21 deadline - such as entities granted disaster relief. Specifically, those impacted by Hurricanes Debby, Francine, Helene, and Milton have until April 23, 2025, to file their beneficial ownership information reports, said FinCEN. Those impacted by Hurricane Beryl and whose deadline was extended to February 6, 2025, are subject to the March 21 deadline.
Plaintiffs in a case currently pending in the 11th U.S. Circuit Court of Appeals also are currently not subject to the March reporting deadline. (National Small Business United v. Treasury, No. 24-10736) That exception is available to the named plaintiffs as well as those who were members of the National Small Business Association as of March 1, 2024, said FinCEN.
Further deadline modifications ahead? The Trump administration has generally taken the position that the Corporate Transparency Act's beneficial ownership information reporting requirements are enforceable. It has, however, indicated in its briefing that it will look at options "to prioritize reporting for those entities that pose the most significant national security risks while providing relief to lower-risk entities."
In line with that and what FinCEN called "Treasury's commitment to reducing regulatory burden on businesses," there may be further changes to the reporting deadline. FinCEN's February 19 announcement indicates it will assess available options to modify deadlines under the law.
Meanwhile, Congress has weighed in - the House unanimously passed a bill last week that would push the reporting deadline for most entities to January 1, 2026. The Senate has not taken action yet, but it certainly has time to do so before March 21.
Filing reports. With reporting now mandatory, FinCEN reminded entities that they can file beneficial ownership information reports free of charge by using FinCEN's e-filing system at https://boiefiling.fincen.gov . Additional information about filing, including FAQs, are available at fincen.gov/boi .
Litigation continues. Despite this latest development, cases are still pending in courts around the country contending that the Corporate Transparency Act is unconstitutional. It's been a mixed bag for plaintiffs in those cases thus far.
Most recently, a Maine federal district court denied relief to an individual with ownership interests in real estate limited liability companies. (Boyle v. Bessent, (DC ME, 2/14/2025) 135 AFTR 2d ¶2025-400)
Rejecting the plaintiff's argument that Congress exceeded its authority in enacting the Corporate Transparency Act, the Maine court concluded that the "regulated activity" of reporting law "is economic or commercial in nature."
Though the plaintiff in Boyle contends that his companies' activities were non-commercial- and thus outside of the Commerce Clause - the court disagreed. "That all of Plaintiff's companies have engaged in real estate transactions only highlights the intrinsically economic and commercial nature of corporate entities," reads the opinion.
Noting the "massive role corporate entities play in the modern economy," the court said there is a "rational basis exists to conclude corporate entities' existence has a substantial effect on interstate commerce."
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