FinCEN Suspends All Enforcement of BOI Reporting Until Further Guidance Is Issued

This continues to be a developing story. There may be additional challenges, court rulings, legislative actions, and FinCEN guidance that continue to impact Beneficial Ownership Information (BOI) filing requirements. KSM will provide updates as additional information becomes available. For the most recent updates, visit KSM’s Financial Crimes Enforcement Network (FinCEN) insights page.

---

The Corporate Transparency Act introduced a new reporting requirement for BOI, which went into effect Jan. 1, 2024. Enforced by FinCEN, the requirement states that reporting companies must disclose detailed information about their Beneficial Owners and Company Applicants. However, enforcement of the BOI reporting requirement has once again been suspended.

There are two recent announcements that suspend enforcement of the BOI reporting requirement.

1. FinCEN issued a notice on Feb. 27, 2025, announcing that it will not pursue any enforcement actions against any reporting companies for failure to file or update BOI reports until a forthcoming interim final rule establishes new deadlines. This indicates that reporting companies are not currently required to file or update BOI reports. FinCEN intends to issue the interim final rule before March 21, 2025.
2. On March 2, 2025, the Department of Treasury announced that it will not enforce any penalties or fines associated with BOI reporting requirements pending issuance of the interim final rule, nor will it enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners even after the interim final rule is issued. Treasury plans to issue a proposed rulemaking that will narrow the scope of the BOI reporting requirement to foreign reporting companies only. While it is unclear whether Treasury has the authority to permanently not enforce a law passed by Congress, it appears this law will not be enforced against U.S. citizens or domestic companies for now.

In addition to FinCEN’s stated intent to provide an extended deadline and Treasury’s intent to narrow the BOI obligation to foreign reporting companies only, the U.S. House of Representatives passed legislation on Feb. 10, 2025, to extend the BOI reporting deadline for many reporting companies to Jan. 1, 2026. It is unknown whether this legislation will ultimately pass through Congress, and it is unknown whether the scope of this legislation will be expanded to mirror the two recent announcements discussed above.

Timeline of BOI Reporting Requirement

Date	Detail
Dec. 3, 2024	The U.S. District Court for the Eastern District of Texas blocked enforcement of BOI reporting by issuing a nationwide injunction on compliance with BOI obligations. The Department of Justice quickly filed a Notice of Appeal and subsequently requested a stay as to the preliminary injunction. Meanwhile, FinCEN acknowledged their intent to comply with the preliminary injunction pending the outcome of these court proceedings.
Dec. 23, 2024	The U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction. Thus, the requirement for reporting companies to file BOI reports was back in effect, with a short deadline extension granted to Jan. 13, 2025, for most filings. The Dec. 26, 2024, ruling has reversed this ruling by vacating the stay order.
Dec. 26, 2024	In a surprise ruling, a panel of the U.S. Court of Appeals for the Fifth Circuit reinstated a nationwide injunction that suspends enforcement of BOI reporting obligations. This latest twist vacated the same court’s order from three days earlier granting a stay of the injunction.
Jan. 23, 2025	The U.S. Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry). However, a separate nationwide order was issued by a different federal judge in Texas related to a different case (Smith v. U.S. Department of Treasury), which still remains in place (and the government has yet to appeal). As a result of the second nationwide order, reporting companies were not required to file beneficial ownership information with the FinCEN despite the Supreme Court’s ruling.
Feb. 18, 2025	The U.S. District Court of the Eastern District of Texas (Smith v. U.S. Department of Treasury) granted the government’s motion to stay the last remaining nationwide injunction. Thus, reporting companies were once again required to file beneficial ownership information with the FinCEN. Most reporting companies were subject to an extended deadline of March 21, 2025. However, this deadline was effectively suspended by FinCEN’s notice dated Feb. 27, 2025.

Continued Vigilance in a Rapidly Evolving Environment 

Reporting companies should maintain a level of readiness with respect to their pending BOI reporting requirements. Quick action may be required as additional guidance and notices are issued. As we have seen, this continues to be a moving target and uncertainty persists.

It is important to monitor BOI filing requirements and related deadlines. Penalties for willfully violating the BOI reporting requirements include:

• Civil penalties of up to $591 per day that a violation is not remedied (amount adjusted for inflation)
• Criminal penalties of up to a $10,000 fine and/or imprisonment of up to two years

Legal Counsel Recommended

Because many aspects of this new reporting requirement are legal in nature and outside the scope of traditional tax and accounting services, consultation with legal counsel is recommended regarding current compliance requirements and guidance relating to court procedures.

BOI Resources

For more information on the new reporting requirement, FinCEN offers detailed and helpful guidance on BOI reporting, including:

• BOI reporting resource page
• BOI FAQs
• BOI Small Entity Compliance Guide

If you have questions or would like further information, please contact a KSM advisor via the form below.