Recent litigation has temporarily halted compliance with the Corporate Transparency Act (CTA), introducing new complexities for CPAs advising clients on Beneficial Ownership Information (BOI) reporting.
On December 3, 2024, a federal court in Texas issued a nationwide preliminary injunction in Texas Top Cop Shop, Inc. v. Garland. This decision pauses the CTA’s reporting requirements and enforcement while the litigation proceeds. The Department of Justice has appealed the ruling, and the situation remains fluid.
Key Implications for Businesses
While the injunction is in effect, affected entities are not required to file BOI reports with FinCEN. Importantly, they will not face liability for noncompliance during this period. However, businesses may still voluntarily submit reports if they choose to do so.
FinCEN has confirmed its compliance with the court order, emphasizing the CTA’s role in combating illicit financial activity. Several courts outside Texas have upheld the law, and the government continues to defend it as constitutional. You can read FinCEN’s full statement here.
What This Means for CPAs
The AICPA recommends that CPAs offering BOI services encourage clients to stay prepared to file BOI reports if the injunction is lifted. This preparation ensures timely compliance and avoids challenges associated with rushed submissions.
SCACPA encourages members to utilize resources like the BOI Hub for updates on legal developments and compliance guidance.
Looking Ahead
As litigation continues, the future of BOI reporting remains uncertain. SCACPA will continue to monitor developments and maintain proactive communication with you, ensuring readiness if reporting requirements are reinstated.
