CTA BOI Survey for All

[Jim-from-Ohio]

Well how about this. a nationwide injunction has been levied against the BOI.

https://natlawreview.com/article/texas-federal-court-issues-nationwide-injunction-against-enforcemen...

second source: https://news.bloombergtax.com/daily-tax-report/corporate-transparency-act-blocked-nationwide-by-texa...

and: https://www.capitalpress.com/nation_world/nation/judge-puts-nationwide-hold-on-corporate-reporting-l...

[BobKamman]

Surprisingly, the Texas judge is an Obama appointee with an illustrious academic career (undergraduate degree from Pittsburgh, law degree from Baylor). He’s the same judge who was reversed in the 2017 case that Ezekiel Elliott brought against the NFL.

Since no one is enforcing the law right now anyway, this is just something to keep in mind if your clients decide not to comply and the government eventually wins.  Violations in 2025 may not be enforced until 2026, when the penalties may have increased.  I couldn't find whether the Secretary of the Treasury is also included as a defendant, but my guess is that she is, since the Attorney General would only be enforcing the criminal penalties.  Will BOI be repealed in the first 100 days, now that the Isolationists are in charge?  Stay tuned.  

[PATAX]

@Jim-from-Ohio Thank you Jim for that pertinent information. 

[sjrcpa]

The government filed an appeal late yesterday.

[BobKamman]

@sjrcpa How do you know it was "late" ?  These things aren't time-stamped for the online docket.  Incidentally, the judge filed an amended order today (December 6).  It doesn't say what changed, but it runs 80 pages instead of the 79, first time around.  So the government filed an amended appeal to it.  Don't know whether that was done morning, noon or night.  Here is the meat of the amended order:

"Therefore, the CTA, 31 U.S.C. § 5336 is hereby enjoined. Enforcement of the Reporting Rule,
31 C.F.R. 1010.380 is also hereby enjoined, and the compliance deadline is stayed under § 705 of
the APA. Neither may be enforced, and reporting companies need not comply with the CTA’s
January 1, 2025, BOI reporting deadline pending further order of the Court."

Emphasis added.  Just as a reminder that a preliminary injunction is .... preliminary.  But it can still be appealed.  

[PATAX]

Update - go to fincen website to read for yourself: "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."  Go to fincen website to read for yourself just in case of typo, etc. Per previous Bloomberg Law article dated 12/6/2024: "U.S. Appeals Order Halting Corporate Transparency Act Disclosures". Go to Bloomberg Law and read for yourself.

[IRonMaN]

And then if the government prevails, how much time will folks have to get things filed?  This whole thing has been messed up since day one.  Has anybody checked lately to see if FinCen is one of those government functions that Elon is going to declare a waste of taxpayer dollars?  😮 

[BobKamman]

Thanks to an email newsletter from James Counts, California CPA, for this bulletin:

A provision for a one-year delay in BOI reporting has been included in the Continuing Resolution (CR).

The relevant language is on page 233 of the bill text using the pdf page number. Here is the link to the entire document:

https://docs.house.gov/billsthisweek/20241216/CR.pdf.

To find any information in the bill (such as this section on page 233 you can hit control F and then in the search box that comes up enter your term you would look for in the bill.

SEC. 122. EXTENSION OF FILING DEADLINE FOR CERTAIN PRE-EXISTING REPORTING COMPANIES.

Section 5336(b)(1)(B) of title 31, United States Code, is amended by striking ''before the effective date of the regulations prescribed under this subsection shall, in a timely manner, and not later than 2 years after the effective date of the regulations prescribed under this sub section,'' and inserting ''before January 1, 2024, shall, not later than January 1, 2026,''.

Before this change it reads:

    (B) Reporting of existing entities.-In accordance with regulations prescribed by the Secretary of the Treasury, any reporting company that has been formed or registered before the effective date of the regulations prescribed under this subsection shall, in a timely manner, and not later than 2 years after the effective date of the regulations prescribed under this subsection, submit to FinCEN a report that contains the information described in paragraph (2).

After the change it reads:

    (B) Reporting of existing entities.-In accordance with regulations prescribed by the Secretary of the Treasury, any reporting company that has been formed or registered    before January 1, 2024, shall, not later than January 1, 2026,    submit to FinCEN a report that contains the information described in paragraph (2).

[Taxes-by-Rocky]

Just thought I would throw this one out there:

If a Federal court imposes a nationwide injunction against filing BOI forms.....wouldn't assisting a client to file a BOI form be considered the practice of law (i.e., you're advising the client to do something that the court has advised you (the client) not to do)?  Or is going against an injunction not considered practicing law?

I'm not an attorney.

[BobKamman]

The injunction is against FinCen for enforcing the law after January 1.  There is no injunction preventing people from filing it anyway.  

It will be ironic if the law was passed over Trump's veto when he was President, but it won't be extended because of Trump's veto when he's not President.  Well, to quote Will Rogers, I'm not a member of any organized political party -- I'm a Republican.  

[Terry53029]

This is from Spidell of CA.

SPIDELL

Tax • Analysis • Education

Congress proposes one-year delay in BOI reporting requirements for most businesses (12-18-24)

Tucked away in the proposed 1,500-page continuing resolution (CR) that Congress is hoping to pass this week is a one-year delay in the January 1, 2025, beneficial ownership information (BOI) reporting deadline for those entities subject to the BOI reporting mandate that were in existence prior to January 1, 2024. (CR Title V, Subtitle C, §122) It is unclear at this stage whether the CR will pass in its current form.

If this provision is enacted as currently proposed, it would not impact the requirement that entities subject to the mandate that are formed in 2024 file their initial report within 90 days of formation and those entities formed after 2024 file their reports within 30 days of formation. However, the preliminary injunction put in place by the U.S. District Court in East Texas has put these requirements on hold, at least for now.