Last week, a federal district court issued a preliminary injunction prohibiting the U.S. Treasury from enforcing the Corporate Transparency Act, and by extension, Beneficial Ownership Information (BOI) reports. In response to this action, the Financial Crimes Enforcement Network (FinCEN), the bureau of the Treasury responsible for administering BOI, has updated its website with an alert statement describing BOI reporting as voluntary while the preliminary injunction remains in effect:
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.
Read the full alert here.
Whether the injunction will remain in effect is uncertain, as the government has already filed its notice of appeal of last week’s decision to the Fifth Circuit. Therefore, while BOI reports are currently voluntary and not subject to liability, it is unclear whether the injunction will still be in effect by the reporting deadline.
Companies may still wish to file BOI reports – or at least have information gathered and ready for filing – should the circumstances change. If you have not yet filed your BOI report, we recommend that you contact your legal counsel to determine next steps.
We will keep you informed of any further developments regarding your company’s obligation to file a BOI report.
