FinCEN Suspends BOI Reporting Obligations Pending Outcome of Rapid-Fire Legal Battle

by Prof. Robert Bloink and Prof. William H. Byrnes

The Corporate Transparency Act (CTA) requires businesses that are classified as “reporting companies” to report certain information about beneficial owners to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Most business entities are subject to new beneficial ownership information (BOI) reporting requirements. Those BOI reporting requirements are designed to combat money laundering, terrorism financing, drug trafficking and other crimes. They have, however, generated significant controversy and confusion since they were announced. As of today, a federal court in Texas has agreed with significant challenges to the BOI reporting requirements and issued a nationwide injunction to prevent FinCEN from enforcing their rules. That said, the legal situation is developing at a rapid-fire pace. Business entities that qualify as reporting companies should pay close attention to the status of the court’s injunction to ensure they remain in compliance with the FinCEN reporting mandate and avoid inadvertently incurring significant penalties.

Court Action Regarding Enforcement of the CTA