To all of our clients

UPDATE: BOI reporting requirement has been canceled for most businesses as of March 2, 2025

On Sunday, March 2, 2025, FinCEN continued with its guidance by announcing that it will not enforce any penalties or fines associated with the beneficial ownership information (BOI) reporting rules under existing regulations. Additionally, FinCEN will not enforce any penalties or fines against U.S. citizens or domestic reporting companies, or their beneficial owners.

The reason for the relief is that the Department of the Treasury will propose new rulemaking that will narrow the scope of the beneficial owner reporting rules to apply to foreign reporting companies only. This means that domestic entities will not be required to file any BOI reports.

At this time there is no information on what, if anything, will need to be done for domestic entities that have already filed.

The full text of the Treasury release is available at:

https://go.spidell.com/e/837113/news-press-releases-sb0038/5zcm1x/2462704122/h/_iNCB2S5xkFfoJ74SbClPuQHqSaWmniaI-VQcUFvSVE

Previous UPDATES

Beneficial ownership information reporting mandate back on (02-19-25)

Today FinCEN announced that the beneficial ownership information (BOI) filing mandate is now back on, with a new filing due date of March 21, 2025. (FinCEN Notice FIN-2025-CTA1 (February 18, 2025)) The reinstatement was triggered by the U.S. District Court for the Eastern District of Texas’s February 18, 2025, decision to lift the preliminary injunction it had issued in the Smith case. (Smith, et al. v. U.S. Department of the Treasury, et al.(February 18, 2025) U.S. Dist. Ct., E.D. Tex., Case No. 6:24-cv-00336)

The new March 21, 2025, due date applies to the vast majority of reporting companies to file an initial, updated, or corrected BOI report, including those entities formed prior to January 1, 2024. Entities formed in 2025 must file by the later of March 21, 2025, or 30 days from the date of formation.

FinCEN indicated that during the next 30 days it will “assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce the burden for lower-risk entities, including many U.S. small businesses.”

Additional information is available at:

www.fincen.gov/sites/default/files/shared/FinCEN-BOI-Notice-Deadline-Extension-508FINAL.pdf

A new panel of the U.S. Fifth Circuit Court of Appeals is reviewing the lower court’s decision to enjoin the enforcement of the beneficial ownership information reporting requirement. (Texas Top Cop Shop, Inc. et al. v. Garland (December 26, 2024) U.S. Ct. of Appeals, Fifth Circuit, Case No. 24-40792) The review will be expedited, but in the interim the new panel reversed the previous panel’s decision to allow the BOI reporting mandate to continue pending the court of appeal’s review.

As the law stands today, penalties cannot be imposed against businesses who fail to file BOI reports with FinCEN.

In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline as follows:

• Reporting companies that were created or registered 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.

On December 23, 2024, the fifth Circuit Court of Appeals has just stayed the injunction against the Corporate Transparency Act.  This means that if you are required to file Beneficial Ownership Information, you must do it by the end of the year.  Please contact your council immediately if you haven’t filed already.

On December 3rd, 2024, a federal district court, finding that the Corporate Transparency Act (CTA) is likely unconstitutional, issued a temporary injunction prohibiting the enforcement of the CTA and the beneficial ownership information (BOI) reporting rule in the CTA’s accompanying regulations.  The injunction is likely to be appealed and could be lifted at any time during the appeal process. Thus, some authors are saying you should still be prepared to comply by the December 31^st, 2024 due date, if the injunction is lifted.  We recommend you discuss this with your legal counsel.

Much has been said and written about the new reporting requirement under the government organization called the Financial Crimes Enforcement Network or FinCEN.

All small businesses that have registered with a Secretary of State (SOS), including LLC’s, Partnerships of all types, S-Corporations, C-Corporations, and Trusts have to register and disclose Beneficial Ownership Information or BOI to FinCEN.

A small business is one that has 20 or fewer full-time employees, $5 million or less in domestic gross receipts reported on their prior tax return, and a physical U.S. presence.

THIS IS A NEW REQUIREMENT that was part of the Corporate Transparency Act.

A company registered with the SOS to do business before January 1, 2024, will have until January 1, 2025, to register and disclose BOI to FinCEN.

A company registered with the SOS to do business after January 1, 2024, and before January 1, 2025, had 90 days to register and disclose BOI to FinCEN.  Formation attorneys and companies that assist with formations of new companies were aware of this.

A company registered with the SOS to do business after January 1, 2025, will have 30 days to register and disclose BOI to FinCEN.

Beneficial owners include senior officers, an individual that has authority to appoint or remove certain officers or a majority of directors of the company, an important decision-maker, or any other form of substantial control in the company.  A beneficial owner is also any individual who, directly or indirectly, owns or controls at least 25% of the ownership interest of the reporting company.

BOI includes the individuals full legal name, date of birth, current street address (no PO boxes allowed), a unique number from a passport or driver’s license, and an image of the document used.

BOI is only registered once, unless anything changes, then it must be updated.

There are severe civil and criminal penalties and fines and even imprisonment for noncompliance.

THIS IS A FUNDAMENTALLY NON-TAX, LEGAL PROVISION OF LAW.  THE REQUIREMENTS ARE COMPLEX AND NECESSITATE LEGAL ASSISTANCE.

MOORE MESSINA WEBB, LLP IS NOT A LAW FIRM AND WE RECOMMEND YOU SEEK LEGAL HELP WITH COMPLIANCE.

For more information or to self-file please visit their website: https://fincen.gov/boi