The Financial Crime Enforcement Network‘s (FinCEN) Beneficial Ownership Information reporting rule and requirements as mandated by the Corporate Transparency Act (CTA) are back in effect. A Texas federal court in the Smith et al. v. U.S. Department of Treasury case lifted the injunction halting FinCEN’s actions related to the Beneficial Ownership Information Reporting Rule. The Texas federal court’s actions are in alignment with the Supreme Court’s decision in the Texas Top Cop Shop, Inc. order lifting a nationwide injunction related to the CTA. Actions by the Supreme Court and the Texas federal court will now allow FinCEN to proceed with further implementation and enforcement of the Beneficial Ownership Information Reporting Rule.
FinCEN has announced that it is extending the compliance deadline to March 21, 2025, for reporting companies and entities to file initial BOI reports or to update and correct a BOI report. FinCEN is providing entities with additional time due to current litigation. FinCEN has also noted that it “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.”
Please find FinCEN’s Impact Statement here regarding the current litigation and update.
NAR will continue to provide insight and updates as it relates to the Beneficial Ownership Information Reporting Rule and the Corporate Transparency Act (CTA)
Update: On December 26, 2024, the U.S. Court of Appeals for the Fifth Circuit reinstated the nationwide injunction halting further implementation and enforcement of the Corporate Transparency Act (CTA). The current order also prevents the Financial Crimes Enforcement Network (FinCEN) from enforcing the Beneficial Ownership Information Reporting Rule.
To learn more about the decision, please see: www.ca5.uscourts.gov/opinions/unpub/24/24-40792..pdf
Third and final update on the BOI Report (Beneficial Ownership Information) as of December 24th with NEW reporting requirements for brokerages structured as a CORP or LLC… The U.S. Court of Appeals lifted the injunction for implementation and enforcement of the Beneficial Ownership Rule…. so U.S. Companies must file a report with the Financial Crimes Enforcement Network (FinCEN) by January 13, 2025. We filed this quickly online for both the Board and MLS to share company information along with the contact information for any beneficial owners or those in control of the company. Please visit fincen.gov/boi for all of the details including who is exempt!
- Reporting companies that were created prior to January 1, 2024, have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.) Those created in the future have 30 days to make this report.
BOI Compliance Resources
- NAR’s Advocacy and Legal Teams provided a compliance webinar on reporting requirements, and you can find the webinar recording here.
- You will also find additional guidance on reporting at fincen.gov/boi, including a five-minute demo video with step-by-step instructions on how to file the BOI Report.
- If you have any additional questions or concerns, please contact nduggins@nar.realtor, or 202-383-1085.
Old Articles on this subject:
In October, we reported in this REcap that some Brokerages may have a new federal reporting requirement in 2024. Most registered business entities — LLCs and Corporations, not Sole Proprietors were compelled to file a beneficial ownership information report (BOI) by the end of the year with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury.
Hold on to your hats, on December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction enjoining the federal government from enforcing the Corporate Transparency Act (CTA). NAR is reviewing the court order. Litigation continues and it is possible the federal government will appeal the preliminary injunction. NAR recommends that members consult legal counsel for legal advice regarding compliance and the implications of the preliminary injunction on their businesses. As of this writing, FinCEN’s BOI Reporting entity remains open and is accepting BOI Reports, despite the preliminary injunction prohibiting FinCEN from implementing or enforcing the CTA and BOI Reporting Rule. Sandy Carroll will be attending an informational legal webinar next week on the injunction and will keep you posted.