FinCEN Response (1/24/25)
On January 23, 2025, the 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—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
Original Article (1/23/25) by Brian Calley
Remember the back and forth of the Corporate Transparency Act and the new reporting requirements on small businesses? Until today there was an injunction on that law based on a case out of Texas. The injunction (which prevented enforcement of the new law) was appealed to the Supreme Court of the United States and the injunction was lifted. This means that the Corporate Transparency Act is back on.
Because the reporting deadline was December 31, 2024, the lifting of the injunction means that any small business subjected to the law who has not yet filed is now late in their filing. However, last time there was a court decision like this, the regulatory body (FinCEN in this case) gave a 2-week grace period to file. We will monitor this and let you know as soon as we know.
There are a couple things to consider… There was another national injunction on this law, but since that injunction is on the regulation and not the law itself, it is not crystal clear as to your requirement to file. Since non-compliance with the Corporate Transparency Act does carry criminal penalties, we do recommend complying based on whatever date FinCEN publishes.
Finally, remember that SBAM has an active case too and it has been through full litigation at the local level. We are hopeful that we might obtain an inunction for our members through that decision which we expect literally any day now. So stay tuned for updates on a new FinCEN reporting deadline and on SBAM’s case in Michigan’s Western District.