BOI Reporting Back in Effect After Injunction Lifted, FinCEN Says
The U.S. District Court for the Eastern District of Texas lifted its preliminary injunction against the enforcement of the Corporate Transparency Act on Feb. 18, meaning CTA reporting requirements are now "once again back in effect," the Treasury Department's Financial Crimes Enforcement Network said.
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FinCEN said Feb. 19 that it will give companies "additional time to comply" with the rules, including by extending the reporting deadline 30 calendar days from Feb. 19, which would be March 21, for most companies. A notice posted on FinCEN's website includes the potential deadlines for various companies and information on what they must report.
The agency also said it may "further modify deadlines" and will prioritize reporting for entities "that pose the most significant national security risks."
The Texas court's decision was the latest legal hurdle facing CTA, which also saw arguments at the Supreme Court (see 2501240006). The CTA's beneficial ownership reporting requirements 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 2501030018).
Treasury and FinCEN have received criticism from some lawmakers for not doing enough to educate small businesses about the BOI reporting rules (see 2502110032). FinCEN this week said it plans to "initiate a process" this year to revise the rules to "reduce burden for lower-risk entities, including many U.S. small businesses."
The Financial Accountability & Corporate Transparency Coalition, an advocacy group promoting a transparent tax system, celebrated the lifting of the injunction. The group's director, Ian Gary, said in a statement that "Treasury is now once again free to continue its full and faithful implementation of the most important anti-money laundering law of the past two decades."