On February 17, 2025, a U.S. federal court granted the U.S. federal government’s motion to lift a nationwide injunction in place, that was preventing the enforcement by the Financial Crimes Enforcement Network (“FinCEN”) of the Corporate Transparency Act (“CTA”). The effect of this ruling is that the CTA is once again back into effect and enforceable.
FinCEN previously signaled that it would grant an extension of the filing deadline for beneficial ownership information reports (“BOI report”) if the injunction was lifted. On February 19, 2025, FinCEN confirmed its intention by issuing a public announcement. For the vast majority of reporting companies, the new deadline to file an initial, updated, and/ or corrected BOI report is now March 21, 2025. FinCEN acknowledged that reporting companies that were previously given a reporting deadline later than the March 21, 2025 deadline must file their initial BOI report by that later deadline. For example, if a company’s reporting deadline is in April 2025 because it qualifies for certain disaster relief extensions, it should follow the April deadline, not the March deadline.
FinCEN further announced that during this 30 day extension period it will assess its options to further modify deadlines in effort to reduce regulatory burdens on businesses, while prioritizing reporting for those entities that pose the most significant national security risks. Perhaps most interesting from FinCEN’s announcement is that it intends to initiate a process this year to revise the FinCEN regulations to reduce the burden for lower-risk entities, including many U.S. small businesses.
As further updates, the U.S. Congress has two impending pieces of legislation that could be signed into law. One such piece of legislation would repeal the CTA all together. The other piece of legislation, which has been passed by the House with bipartisan support, would grant an extension of the filing deadline until January 1, 2026 for reporting companies who were in existence prior to January 1, 2024.
It is unclear today, the future form of the CTA with impending cases to still address the law’s constitutionality and impending legislation that could change the law. With all of the developments of the CTA since late last year causing a number of fire drills, we continue to expect further developments in this area which we will continue to monitor.
What is clear today, though, is that the CTA is back on and reporting companies who have not yet filed their BOI reports should take immediate action to do so. Reporting companies should not expect such potential future developments to occur before the end of the 30 day extension window. The working assumption should be, this is not a fire drill.
