Injunction Back in Effect for FinCEN's Beneficial Ownership Reporting Rules
A nationwide injunction stopping the Corporate Transparency Act’s beneficial ownership information (BOI) reporting requirements from taking effect was reinstated last week, making it so certain companies won't have to comply with the law's reporting rules next month.
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The U.S. Court of Appeals for the Fifth Circuit issued an order on Dec. 26 vacating an earlier decision by a different panel from the court that had temporarily lifted the injunction (see 2412240027). The injunction is now back "in effect and reporting companies are not currently required to file beneficial ownership information with" the Treasury Department's Financial Crimes Enforcement Network, FinCEN said in a notice on its website.
The BOI reporting rules, which would have required most companies to submit reports to FinCEN in January, are designed to help the government prevent sanctioned parties and others from hiding money or property in the U.S. by requiring those companies to provide FinCEN with detailed ownership information (see 2312210017 and 2401050023). Some lawmakers had called on the Treasury to delay implementation of the new requirements (see 2411190066).
Rep. French Hill, R-Ark., the incoming chairman of the House Financial Services Committee, said Dec. 27 that he welcomes the appellate court's decision to reverse course and reinstate the injunction.
"Although it is great news that the January deadline is temporarily paused once again, I recognize how confusing all these legal developments are for small businesses just days away from the imminent deadline," Hill tweeted. "I am closely monitoring any further legal developments and will keep fighting this reporting requirement in Congress."