Corporate Transparency Act Back in Action as FinCEN Resumes Oversight

The enforcement of the Corporate Transparency Act (CTA) is back in effect following a federal court’s decision to stay the last remaining nationwide injunction against it. This allows the U.S. Department of the Treasury and FinCEN (Financial Crimes Enforcement Network) to proceed with enforcing beneficial ownership information (BOI) reporting requirements.

Court Ruling Reinstates CTA Obligations

In Smith, et al. v. U.S. Department of the Treasury, District Court Judge Jeremy Kernodle lifted his nationwide injunction, based on the Supreme Court’s recent decision in Texas Top Cop Shop. Now the federal government can require businesses to comply with BOI reporting under the CTA.

In an official statement, FinCEN explained: “On February 18, 2025, the court agreed to stay its January 7, 2025, order until the appeal is completed. Given this decision, FinCEN’s regulations implementing the BOI reporting requirements of the CTA are no longer stayed. Thus, subject to any applicable court orders, BOI reporting is now mandatory, but FinCEN is providing additional time for companies to report.”

FinCEN extended the reporting deadline for most companies affected by the injunction. The new deadline to file initial, updated or corrected BOI reports is March 21, 2025. However, companies with previously scheduled later deadlines (e.g. disaster relief extensions) must stick to those dates.

Potential Adjustments and Regulatory Changes

FinCEN says more changes to deadlines and requirements are possible. During this 30 day extension FinCEN will be evaluating options to prioritize reporting for high risk entities and reduce the burden on lower risk businesses, including many US small businesses.

Also, FinCEN will be revising the BOI rule later this year to simplify compliance and address industry concerns. Despite the CTA being reinstated, the litigation in the Texas Top Cop Shop and Smith v. Treasury cases is still ongoing. If the plaintiffs win, future enforcement of the CTA could be impacted.

Preparing for the BOI Reporting Deadline

Now that the CTA is back, businesses should get ready for the March 21, 2025, deadline. Those that have already filed their BOI should review their submissions to see if updates or corrections are needed.

Given the possibility of more extensions, businesses may choose to wait until closer to the deadline to file to avoid having to amend. But monitoring compliance is still important.

Suggested Read: 

Big BOI Reporting Update: Small Businesses Get a Break from the Deadline!

Corporate Transparency Act: Beneficial Ownership Filing Suspended

Corporate Transparency Act: Congress Members Request for Delay