The Supreme Court’s recent decision adds another twist to the ongoing uncertainty surrounding Beneficial Ownership Information (BOI) reporting under the Corporate Transparency Act (CTA).
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By The Guillen Pujol CPAs Newsroom
The evolving legal landscape of the Beneficial Ownership Information (BOI) reporting took another turn with the U.S. Supreme Court’s January 23 ruling in McHenry v. Texas Top Cop Shop. While the Court lifted a previous injunction that had blocked the enforcement of the Corporate Transparency Act (CTA), another court order in Smith v. U.S. Department of the Treasury has kept the law’s implementation on hold.
Despite this ruling, Beneficial Ownership Information (BOI) reporting requirements remain suspended nationwide, leaving businesses in a state of uncertainty. The Financial Crimes Enforcement Network (FinCEN) has confirmed that while entities are not currently required to file, they may still do so voluntarily.
With conflicting court decisions and ongoing legislative challenges, the future of BOI reporting remains unclear. Businesses must stay informed and prepared as the legal landscape continues to shift.
Beneficial Ownership Information (BOI) reporting | The SCOTUS Ruling and Its Implications
In McHenry v. Texas Top Cop Shop, the Supreme Court addressed a challenge to the CTA’s reporting requirements, ruling in favor of their enforcement. Despite this decision, a separate injunction in the Smith case, which applies nationwide, has effectively paused the implementation of the CTA. FinCEN clarified in a January 24 alert:
“Reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action.” This duality in legal decisions has left businesses in a state of limbo. Attorney Melissa Wiley, as quoted in a recent Thomson Reuters article, suggested the stay in Smith could reflect a broader political strategy:
“This may be a way for the current administration to signal its intent not to defend the law’s constitutionality,” Wiley said. She added that while the stay in Smith could be lifted if appealed, no such steps have been taken, leaving the regime effectively on hold.
What’s Next for the Beneficial Ownership Information (BOI) Reporting?
The future of BOI reporting remains unclear, with lawsuits challenging the CTA’s constitutionality continuing in various circuit courts. Notably, courts in the Fifth and Eleventh Circuits have ruled against the law, while those in the Fourth and Ninth Circuits have upheld it, setting the stage for a potential circuit split.
In Congress, legislative efforts to repeal the CTA are underway. Bills introduced in January, such as the Repealing Big Brother Overreach Act (S. 100 and H.R. 425), aim to dismantle the reporting requirements. However, their progress remains uncertain amid competing legislative priorities.
Beneficial Ownership Information (BOI) Reporting: How Businesses Should Prepare
Amid this legal uncertainty, businesses should adopt a cautious yet proactive approach:
- Stay Prepared: Gather the required Beneficial Ownership Information and ensure it is accurate and ready to file should enforcement resume.
- Voluntary Filing: Consider submitting BOI reports voluntarily to demonstrate compliance and avoid future delays.
- Monitor Developments: Keep abreast of legal updates and legislative changes that may impact the CTA.
- Consult Professionals: Seek guidance from compliance experts to navigate the complexities of BOI reporting requirements.
At Guillen Pujol CPAs, we are committed to helping businesses remain compliant and informed in this evolving regulatory environment. With extensive experience filing BOI reports, our team is ready to assist you in navigating these challenges.
Beneficial Ownership Information (BOI) reporting: The Saga Continues
The SCOTUS ruling has added another layer of complexity to the already intricate BOI reporting landscape. While enforcement remains on hold, businesses must stay vigilant and prepared for potential changes. As the legal and legislative battles unfold, the importance of transparency in corporate ownership remains at the forefront of efforts to strengthen financial integrity.
For expert guidance and up-to-date information, contact The Guillen Pujol CPAs team today.
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Note: This article reflects the legal status as of February 2, 2025. Businesses are advised to consult with legal and tax professionals for the most current information.
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