Federal Beneficial Ownership Information Reporting (BOIR) Requirement Paused…Again!
Federal Beneficial Ownership Information Reporting (BOIR) Requirement Paused…Again!
Nationwide Injunction is Reinstated and Reporting Deadlines Paused
On December 3, 2024, the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction against enforcing the BOIR requirements. Then, on Monday, December 23, 2024, the Fifth Circuit Court of Appeals reversed the prior District Court ruling and stayed the nationwide preliminary injunction, which meant that the injunction was no longer in effect. However, on December 26, 2024, a different panel of the Fifth Circuit Court of Appeals issued a new order effectively reinstating the nationwide preliminary injunction. As a result, the BOIR requirements are again paused, and enforcement is suspended pending further proceedings. Therefore, as of December 26, 2024, reporting companies are not required to file beneficial ownership information until further court order.
However, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has advised that reporting companies may continue to voluntarily submit beneficial ownership information reports. If and when so ordered, anyone who owns 25% or more of a Corporation, LLC (including single member LLC), or Partnership, would be required to report their ownership to FinCEN. This reporting requirement is part of the federal government’s anti-money laundering and anti-tax evasion efforts and is an attempt to look beyond shell companies that are set up to hide money.
The initial reporting date for entities starting in 2024 (January 1, 2024, and beyond) was to be within 30 days of an entity’s formation / registration with the Secretary of State, and for entities formed prior to January 1, 2024, the initial deadline for reporting was January 1, 2025. Any reported information that later changes, including by sale or transfer of a beneficial ownership interest, would require updated reporting within 30 days of the change.
For more information, visit the following Financial Crimes Enforcement Network (FinCen) website at:
https://www.fincen.gov/boi. You can file the report directly via this website.
During this period of “on again, off again” confusion, there has been an apparent uptick in fraudulent attempts to solicit information from individuals and entities who may be subject to the BOIR requirements. Use extreme caution and do not give personal information, including beneficial ownership information, to anyone unless they have verified the authenticity of the other party.
FinCEN advises to be on the lookout for anything that may indicate correspondence you receive is fraudulent. For example, be cautious of any of the following:
- Correspondence requesting payment. There is NO fee to file BOIR directly with FinCEN. FinCEN does NOT send correspondence requesting payment to file BOIR. Do not send money in response to any mailing regarding filing your beneficial ownership information report that claims to be from FinCEN or another government agency.
- Correspondence that asks the recipient to click on a suspicious URL or to scan a suspicious Q-R code. Those emails or letters could be fraudulent. Do not click any suspicious links or attachments or scan any suspicious QR codes.
- Correspondence regarding penalties. FinCEN does NOT send initial correspondence regarding the Corporate Transparency Act (CTA) penalties via email or over the phone. Do not submit payments via phone, mail, or websites as requests/directions to do so are fraudulent.
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