FinCEN’s BOI Reporting Requirement Back in Effect With Short Deadline Extension

The Corporate Transparency Act introduced a new reporting requirement for Beneficial Ownership Information (BOI), which went into effect Jan. 1, 2024. Enforced by the Financial Crimes Enforcement Network (FinCEN), the requirement states that reporting companies must disclose detailed information about their Beneficial Owners and Company Applicants.

On 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.

On 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 is no longer suspended and reporting companies must take quick action to timely file their initial BOI reports if they have not already filed.

Deadline Extensions Granted

The Department of the Treasury and FinCEN have issued guidance providing additional time for many reporting companies to file required BOI reports. Per FinCEN:

• In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline as follows:
  • Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)

FinCEN’s full alert can be found on its BOI resource page. The alert provides several additional deadline extensions including extensions for certain reporting companies created on or after Sept. 4, 2024 and those that qualify for previously granted disaster relief.

Penalties May Apply

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 Required

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

This continues to be a developing story. There may be additional challenges and court rulings that continue to impact BOI filing requirements. KSM will provide updates as additional information becomes available.