The Chronicles Of Grant County
Federal Government Suspends Enforcement
Of New Federal Reporting Requirements
Accepts Voluntary Compliance
Part Three And A Half
The logo for the Beneficial Ownership Information Reporting Program of the Financial Crimes Enforcement Network of the United States Department of the Treasury. (The image was provided courtesy of the U S Department of the Treasury.)
Due to actions in the Federal courts, the United States Department of the Treasury has included the following statement on the website for the Financial Crimes Enforcement Network (FinCEN) regarding the requirements for most businesses to file Beneficial Ownership Information (BOI) Reports as part of adherence to the Corporate Transparency Act (CTA):
"BOI e-Filing Alert: Please note that beneficial ownership information reporting [BOIR] requirements have been affected by a recent Federal court order. The Department of the Treasury is appealing that order. In the meantime, reporting companies are not currently required to file a BOIR and are not subject to liability if they fail to do so while the applicable order remains in force."
"However, reporting companies may still opt to file a BOIR."
You can view this summary statement by clicking here.
That summary statement is then linked to the following more detailed statement from the U S Department of the Treasury:
"Alert: Impact of Ongoing Litigation – Deadline Stay – Voluntary Submission Only"
"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 Corporate Transparency Act (CTA) plays a vital role in protecting the U S and international financial systems, as well as people across the country, from illicit finance threats like terrorist financing, drug trafficking, and money laundering The CTA levels the playing field for tens of millions of law-abiding small businesses across the United States and makes it harder for bad actors to exploit loopholes in order to gain an unfair advantage."
"On Tuesday, December 3, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), a Federal district court in the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction that: (1) enjoins the CTA, including enforcement of that statute and regulations implementing its beneficial ownership information reporting requirements, and, specifically, (2) stays all deadlines to comply with the CTA's reporting requirements. The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024."
"Texas Top Cop Shop is only one of several cases in which plaintiffs have challenged the CTA that are pending before courts around the country. Several district courts have denied requests to enjoin the CTA, ruling in favor of the Department of the Treasury. The government continues to believe – consistent with the conclusions of the U S District Courts for the Eastern District of Virginia and the District of Oregon – that the CTA is constitutional."
"While this litigation is ongoing, FinCEN will comply with the order issued by the U S District Court for the Eastern District of Texas for as long as it remains in effect. Therefore, reporting companies are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect."
The requirement for most businesses, unless exempted, had been to file detailed BOI reports with the FinCEN by January 1, 2025.
Penalties for non-compliance had included civil penalties of $591 fines for each day that a person willfully violated the BOI reporting requirements as well as criminal penalties of up to two years in prison and up to $10,000 in fines.
(Previous news reporting had indicated that civil penalties included fines of $500 for each day that a person willfully violated the BOI reporting requirements. The Federal government had included an adjustment for inflation for non-compliance so the initial amount of $500 for a daily fine has been adjusted upward to $591, according to the most recent statement from the U S Department of the Treasury.)
Please note that this situation is fluid.
The Federal government could choose to again begin enforcement of the new Federal reporting requirements.
As noted previously in this news series, businesses may want to contact an attorney or another professional of their choice to determine whether they may be exempt from filing a BOI report with the FinCEN or if they are or will be required to file a BOI report at some point.
Do you have questions about communities in Grant County?
A street name? A building?
Your questions may be used in a future news column.
Contact Richard McDonough at
If your email does not go through, please contact
© 2024 Richard McDonough
