FinCEN Confirms Suspension of Corporate Transparency Act Filing Requirements

This past weekend, the U.S. Financial Crimes Enforcement Network (“FinCEN”) posted a statement on its webpage confirming it would comply with the preliminary injunction against enforcement of the Corporate Transparency Act (“CTA”) entered on December 3, 2024, by the U.S. District Court for the Eastern Division of Texas. We discussed the injunction in our Alert issued on December 4, 2024. 

FinCEN’s weekend statement resolves uncertainty concerning the immediate effect of the preliminary injunction on companies (“reporting companies”) that are required to file beneficial ownership information (“BOI”) under the CTA. FinCEN’s statement says:

In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

The U.S. Department of Justice has filed an appeal to end the injunction.

In our December 4 Alert, we recommended that reporting companies continue preparations to comply with the CTA’s reporting requirements so they are ready to file their required BOI reports on short notice if the preliminary injunction is lifted. We also noted that reporting companies have the option to proceed with their CTA filings voluntarily.

Next Steps for Reporting Companies

Our advice in our December 4 Alert remains unchanged:

• Reporting companies should continue gathering the information they need to file their BOI reports so if the injunction is lifted they are able to comply with the filing requirements on a timely basis.
• Reporting companies that have assembled all information needed to file their BOI reports may file their BOI reports voluntarily to avoid the need for ongoing monitoring of the pending litigation.

Burke Warren’s CTA Compliance Team will continue to monitor the pending litigation and subsequent notices published by FinCEN and will issue updated Alerts accordingly. We encourage you to contact our CTA Compliance Team members listed on the right side of this Alert if you need additional guidance.