A federal appeals court on Thursday restored a nationwide injunction blocking enforcement of Beneficiary Information (BOI) reporting requirements, reversing an order the court issued earlier this week.
In its latest order, the Fifth Circuit said it would reinstate the lower court’s injunction “to preserve the constitutional status quo while the merits committee considers the parties’ important substantive claims.” and referred to the panel of judges who would deliver the verdict. appeal.
The AICPA is calling on the government to extend the original January 1, 2025 BOI reporting deadline. This requirement is imposed by the Corporate Transparency Act (CTA) and enforced by the Financial Crimes Enforcement Network (FinCEN).
In a statement Friday, the AICPA said it is seeking guidance from FinCEN to encourage those assisting clients with BOI applications to collect the necessary information from their clients and prepare their applications should the injunction be lifted again. “We will continue to advise people to do so.”
FinCEN issued the latest warning on its BOI information page late Friday, saying companies can voluntarily submit BOI reports.
FinCEN’s warning states, “In light of a recent federal court order, reporting companies are currently not required to submit beneficial ownership information to FinCEN and will not be held liable for failure to do so while the order is in effect. ”. “However, reporting companies may still voluntarily file beneficial ownership information reports.”
On December 3, a federal district court in Texas issued an injunction in Texas Top Cop Shop, Inc. v. Garland, No. 4:24-CV-478 (ED Texas 12/3/24). . Under this injunction, the CTA and BOI reporting regulations will not be enforceable and reporting companies will not be required to comply with the January 1, 2025 BOI reporting deadline until further order of the court.
The Department of Justice (DOJ) appealed the injunction to the Fifth Circuit.
On Monday, a panel of the Fifth Circuit granted the Department of Justice’s motion to lift the injunction. On Thursday, a different panel of judges overturned that order.
Under the CTA, PL 116-283, passed by Congress in 2021 to combat money laundering, reporting companies are required to disclose the identity of the entity’s beneficial owners and beneficial owner information. For new entities established after January 1, 2024, the reporting company must also disclose the identity of the “applicant.” “Applicant” is defined as an individual applying to form a corporation, limited liability company, or other similar entity.
The AICPA regularly updates the BOI Report Resource Center.
— To comment on this article or suggest an idea for another article, contact Neil Amato at neil.amato@aicpa-cima.com.
