A recent Texas court decision has temporarily blocked the enforcement of the Corporate Transparency Act (CTA), creating uncertainty for businesses across the country. In short, the CTA requires many small businesses and entities to disclose their beneficial ownership information (BOI) to FinCEN as part of an effort to combat financial crimes. However, this court order has paused those requirements nationwide—for now.
What Does This Mean for Your Filing Deadline?
Following the injunction, FinCEN announced that the filing deadline is extended until the injunction is lifted. FinCEN has also appealed the case, and many legal scholars are questioning whether the Texas court even has the authority to impose this injunction nationwide. For now, the system is in limbo, leaving businesses to decide how to proceed.
Voluntary Filings Are Still an Option
Although the filing requirement is temporarily on hold, FinCEN is still accepting voluntary filings. Many of our clients are choosing to go ahead and file for peace of mind, knowing they won’t have to monitor the legal proceedings or worry about sudden deadlines if the injunction is lifted.
It’s worth noting that, for most companies, the BOI filing doesn’t require much more information than what you’re already submitting to the IRS—such as details included on your K-1 or tax returns. That said, some businesses with more complex ownership structures may need to disclose additional information.
What Should You Do Next?
While the injunction is in place, there’s no legal requirement to file. However, we recommend taking a few simple steps:
- Use Our Quick Check Tool: First, check if your business even needs to file under the CTA. Not all entities are covered, and this is an easy first step to clarify your obligations.
- Evaluate Voluntary Filing: If you’re eligible, consider whether a voluntary filing makes sense for your business. For many, it’s a simple process that avoids future headaches.
- Stay Informed: We’re closely monitoring this case and FinCEN’s response. If the injunction is lifted or there are significant developments, we’ll provide updates to ensure you’re informed and ready to act.
The landscape around the CTA is evolving quickly, and it’s crucial to make decisions based on your specific circumstances. For now, the injunction has paused mandatory filings, but businesses should weigh the pros and cons of taking proactive steps.
If you have questions about the filing process or need help navigating this, reach out to us or start with our quick check tool to see if your business is impacted. Stay tuned—we’ll continue to keep you updated as this unfolds.
