FinCEN’s BOI Reporting Requirement Back in Effect With an Extended Deadline

This continues to be a developing story. There may be additional challenges and court rulings 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.

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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.

Enforcement of the BOI reporting requirement has been largely blocked since early December pending the outcome of various legal challenges. However, enforcement is now back in effect due to a Feb. 18, 2025, decision by the U.S. District Court for the Eastern District of Texas to stay the last remaining nationwide injunction that was previously blocking enforcement (Smith v. U.S. Department of Treasury).

FinCEN’s commentary related to the ongoing litigation indicates that most reporting companies will have until Mar. 21, 2025, to file an initial, updated, and/or corrected BOI report. Additionally, FinCEN intends to use this 30-day extension period to assess its options to further modify the BOI reporting deadline. It is unknown at this time whether FinCEN will provide additional extensions, but they have left open the possibility that additional extensions will be forthcoming. FinCEN’s full commentary can be found as an alert on its BOI resource page and should be referred to frequently for additional updates.

In addition to FinCEN’s internal assessment of its options, 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.  This legislation passed the House via a 408-0 vote and is pending action by the Senate. However, the legislation that passed the House only extends the BOI reporting deadline for entities that existed prior to Jan. 1, 2024. Thus, this pending legislation will not change the reporting deadline for entities that were formed on or after Jan. 1, 2024. It is unknown whether this legislation will ultimately pass through Congress, and it is unknown whether the scope of the legislation will be expanded.

Reporting companies should plan to comply with BOI reporting requirements by Mar. 21, 2025, with the understanding that FinCEN could delay the deadline further and/or Congress could act to extend the deadline to Jan. 1, 2026.

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.

Continued Vigilance in a Rapidly Evolving Environment 

Reporting companies must be prepared to file by Mar. 21, 2025, unless additional rulings are issued or legislation is passed to extend the reporting deadline. 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.