Small-business owners are back on the hook to file a beneficial ownership information report, with the deadline likely to be reset to one month.
On Monday, Feb. 17, a Texas federal district court judge lifted a pause on the Corporate Transparency Act as the Department of Treasury appeals the decision in the Smith v. Treasury Department case. That effectively puts the beneficial ownership information reporting requirement back into play.
As of press time Wednesday, Feb. 18, the Financial Crimes Enforcement Network (FinCEN), the agency enforcing the law, had not issued guidance following the court order.
However, FinCEN noted in court documents filed earlier this month that it plans to set a new beneficial ownership information filing deadline of 30 days after a court ruling.
During the 30-day deadline extension, FinCEN will look into modifying the Corporate Transparency Act’s beneficial ownership information reporting requirements “to alleviate the burden on low-risk entities while prioritizing enforcement to address the most significant risks to U.S. national security.” It is not clear which companies may be considered low-risk. A Department of Treasury official said assessing options to change requirements aligns with the department’s commitment to reducing regulatory burdens on businesses.
With the Corporate Transparency Act injunction lifted in the Smith case, all eyes are back on a similar case filed by Texas Top Cop Shop. In December, the judge in that case ordered the first nationwide injunction, pausing beneficial ownership information reporting just a few weeks before the Jan. 1 deadline. That decision was reversed days before the deadline, but another court order struck down the law yet again.
In late January, the Supreme Court lifted the Corporate Transparency Act injunction while the Texas Top Cop Shop appeal plays out. However, the Smith injunction remained, keeping beneficial ownership information reporting off the books. With that injunction also gone, small-business owners will have to wait for the Fifth Circuit Court of Appeals to rule on the Texas Top Cop Shop case, with oral arguments scheduled for April 1.
In the meantime, companies can file a beneficial ownership information report at FinCEN.gov/boi. OOIDA’s Compliance Department urges truckers who have to file a BOI report to watch out for websites and services that charge you to file the paperwork. There is no fee if you file directly at FinCEN.gov/boi. The filing requirement is only for small businesses that employ fewer than 20 employees and are incorporated. For example, sole proprietorships and partnerships that are not incorporated do not need to file. More information about the report and the Corporate Transparency Act can be found here. LL
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