The Corporate Transparency Act has been halted (for now).
On December 3rd a federal judge issued a nationwide preliminary injunction halting the federal government's enforcement of the Corporate Transparency Act.
A separate case filed by the National Small Business Association (NSBA) is also progressing through the legal system. In that case, a similar injunction was granted but applied only to NSBA members. However, this recent injunction is nationwide and affects everyone.
What is the Corporate Transparency Act?
The Corporate Transparency Act (CTA) requires most businesses to disclose their ultimate owners. Its aim is to clamp down on "bad actors" who use businesses as fronts for money laundering, tax fraud, financing terrorism, and other illicit activities. This is accomplished through the filing of Beneficial Ownership Information (BOI) reports.
What if I already filed a BOI report?
For now, it's best to wait and see how this situation develops. Ultimately, the federal government already had access to nearly all the information FinCEN was requesting. The main difference was that they wanted us to provide it directly so it could be stored in one central location, rather than them having to compile all the details themselves.
I haven't filed yet, what do I need to do?
Our recommendation: Prepare everything in case the federal government overturns the injunction before the end of the year. It's possible they will not extend the filing deadline, and you might need to act quickly to stay compliant.
If you still want to file, you can file yourself or hire a third party like your CPA (shameless plug: we offer this service) or attorney to help you out too.
How do I stay up to date on this?
It's easy to stay informed:
- Stay subscribed to our emails and we'll keep you in the loop of what's going on.
- Sign up for updates directly from FinCEN.
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A fair warning: there's a lot of incorrect information circulating, especially on social media platforms. Misinformation can lead to tax errors and potential legal issues. Make sure you're getting your information from trusted sources!
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Legal developments like these can shift quickly, and staying prepared is the best way to avoid scrambling at the last minute. Keep an eye on reliable updates so you can make informed decisions and stay compliant if and when enforcement resumes. And remember, if you have questions or need support with BOI filings, we’re here to help!
