Court suspends BOI reporting requirements

By CalCPA Staff, Dec. 4, 2024

SOURCE: https://www.calcpa.org/whats-happening/articles/court-suspends-boi-reporting-requirements

A U.S. District Court has suspended the implementation of the Corporate Transparency Act’s (CTA) Beneficial Ownership Information (BOI) reporting requirements.

The CTA and its implementing regulations, which require U.S. business entities to report stakeholder information to the Treasury Department, required that an estimated 32.6 million existing business entities disclose their beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network before 2025.

The government argued that the law’s function—to crack down on anonymous shell companies and deter money laundering, terrorism financing and other illicit economic activity—falls within Congress’s regulatory duties.

In Texas Top Cop Shop v. Garland, the court ruled that Congress exceeded its authority in enacting the CTA, resulting in an unconstitutional infringement on states’ rights to regulate businesses. The court granted a nationwide injunction prohibiting FinCEN from enforcing the Jan.1, 2025, reporting deadline for all reporting companies.

While we await news from the U.S. Treasury Department and Financial Crimes Enforcement Network on how those entities will proceed, CalCPA, along with all state societies and the AICPA, has urged the government to push back the initial filing deadline by at least one year, to no earlier than Jan. 1, 2026. You can read the full letter here.

We are monitoring the situation and will keep you up to date with any further developments.

Please note that legislation, regulations, tax announcements, and court rulings can be complex and wide-ranging. Before making any determinations for yourself or your client, be sure to review the provisions in detail and consult with experts as appropriate.