Corporate Transparency Act Update - Smith v. U.S. Department of Treasury Lifted
Updated Notice
On February 18, the stay ordered on January 7 in Smith v. U.S. Department of the Treasury was lifted.
FinCEN released a notice that announced the following:
- Updated and/or corrected BOI report with FinCEN is now March 21, 2025;
- Before March 21, 2025, FinCEN may “further modify deadlines” for entities that do not pose significant national security risks. If FinCEN does so, it will provide yet another update “recognizing that reporting companies may need additional time to comply;”
- Importantly, “FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.” This is the indicative statement that the current Administration will seek formal amendments to the BOI Rule, although no details regarding proposed changes have been publicly released.
Current Steps
It is our recommendation that all non-exempt entities should meet the March 21 deadline, pending further communication from FinCEN. While no action has occurred since the lifting of the stay, there are numerous cases still challenging the CTA and proposed legislation that impacts the CTA, which may make raise additional roadblocks to it’s implementation. We will continue to monitor the situation as it progresses.
Previous Notice
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On January 7th, 2025 An injunction was put in place by Smith v. U.S. Department of the Treasury. On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). The Supreme Court decision addresses only the nationwide preliminary injunction issued by the Eastern District of Texas, not the underlying case, which continues on appeal in the Fifth Circuit. Oral arguments for the appeal are still scheduled for March 25, 2025. As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. |
Disclaimer
This page does not constitute legal advice or providing legal services. This page is merely a general announcement of a new regulation. Nothing contained within this page constitutes a lawyer client relationship between Kemp Klein Law Firm and the reader. The implementation of the Corporate Transparency Act is still in development. Further, a variety of other federal and state laws and regulations may apply to your particular business activities. You may contact your legal counsel if you have specific questions.
For further information on these developments and their impact on the CTA click here. Make sure to check out the Legislative Updates section of kkue.com for Important Information and insight on major new legal developments.
Please contact your Kemp Klein Law Firm Attorney or email us at [email protected] if you have any additional questions regarding your company’s reporting obligations or to discuss the process of compliance. Standard Billing Rates will apply.
Our Corporate Transparency Act Compliance Experts
William E. Haines II
Richard C. Bruder
