Attorney Resource Center for the Corporate Transparency Act

Corporate Transparency Act (CTA)

Attorney Resource Center

The Corporate Transparency Act (“CTA”) is effective January 1, 2024, and attorneys are understandably considering how to advise their clients on reporting requirements, penalties, and other details of the new law.  This CTA Attorney Resource Center contains a variety of resources including webinars, links to resources provided by the Financial Crimes Enforcement Network or “FinCEN,” and some resources provided exclusively to InterActive Legal subscribers.  The InterActive Legal Content Team will add resources from time to time to help you provide counsel to your clients who own or control entities that will be required to report under the CTA.

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FinCEN Exempts Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons

Published: March 25, 2025

By Mohineet Khosla, Esq.

Consistent with its announcement of February 27, 2025, and the Department of the Treasury’s announcement of March 2, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule on March 21 which is effective immediately upon publication in the Federal Register.

In the interim final rule, the definition of “reporting company” is limited to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). These foreign companies will not, however, be required to report any U.S. persons as beneficial owners and U.S. persons will not be required to report BOI with respect to any such entity. Accordingly, foreign reporting companies that only have beneficial owners that are U.S. persons will be exempt from the requirement to report any beneficial owners.  Also, all entities created in the United States (those previously defined as “domestic reporting companies”) are exempt from any BOI reporting requirement, including of any non-U.S. person.

Foreign reporting companies that do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN no later than 30 days from the date the interim final rule is published in the federal register for companies already registered to do business in the U.S. or 30 days from the date of receiving notice that they are registered to do business in the United States.

The CTA allows the Department of the Treasury (of which FinCEN is a part) to exempt any entity or class of entities from reporting requirements if the Secretary of the Treasury determines, with the written concurrence of the Attorney General and the Secretary of Homeland Security, that requiring such beneficial ownership information would not serve the public interest and would not be highly useful in national security, intelligence, and law enforcement agency efforts.  FinCEN notes that the Secretary’s determination, with the concurrence of the Attorney General and Secretary of Homeland Security, is also consistent with the direction of the President, including as set forth in E.O. 14192, Unleashing Prosperity Through Deregulation.

FinCEN is accepting comments on this interim final rule and intends to finalize the rule this year.

Based on this complete reversal by the Department of the Treasury with regards to the enforcement of the CTA against U.S. companies and U.S. persons, it would not be unreasonable to assume that the CTA is indeed “dead” for all domestic entities and persons.  It would, it seems, take an act of Congress to amend and revive it again but given the current political environment that is unlikely to happen any time soon.

More CTA News from FinCEN

Published: February 28, 2025

By InterActive Legal Content Team

FinCEN’s latest announcement on beneficial ownership information (“BOI”) reporting under the Corporate Transparency Act was issued yesterday – February 27th.  In the notice, FinCEN stated that it will not be enforcing the current March 21st reporting deadline.  

Yesterday’s announcement promises more information from FinCEN by March 21st in the form of an “interim final rule” that extends BOI reporting deadlines.  It also references other possible changes to the BOI reporting rules later this year.  We will continue to monitor CTA developments.  Stay tuned.

CTA is Back On (Redux)

Published: February 20, 2025

By Mohineet Khosla, Esq.

Yesterday, in Smith v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Texas), the U.S. District Court for the Eastern District of Texas stayed its order dated January 7, 2025, which enjoined enforcement of the beneficial ownership information reporting requirements under the Corporate Transparency Act (the “CTA”) nationwide.  The stay of this order allows the CTA’s reporting requirements to once again be enforced.  Today, FinCEN announced that most reporting companies that would have been required to file reports with FinCEN as of December 31, 2024 will have a 30-day extension of time to file, with a new due date of March 21, 2025.  A few reporting companies that had previously been given disaster-related extensions may continue to use the previously extended deadline if later than March 21, 2025.  In addition, the plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala) continue to be exempt from reporting requirements under the CTA.

FinCEN noted that it will be using this 30-day period to “assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks.”  However, it is unclear whether there will be any changes that would prevent a reporting company that is currently required to report under the CTA from reporting or whether those proposed changes will only be forward-looking.  FinCEN also noted that it intends to start a process “this year” to revise the beneficial ownership information reporting “to reduce the burden for lower-risk entities, including many U.S. small businesses.”  Again, it is unclear whether any relief will be forthcoming from the FinCEN before the March 21, 2025 reporting deadline for companies that were in existence as of January 1, 2024 and had an original deadline of December 31, 2024.  Meanwhile, the House unanimously passed a bill on February 10, 2025, which seeks to extend the CTA’s reporting deadline for these entities to January 1, 2026, and a companion bill was introduced in the Senate last week.  While you may not want to allow the reporting requirements tail to wag the entity-formation dog, it may be worthwhile to wait for further guidance from FinCEN before creating a new reporting company that would currently be subject to a 30-day reporting window if the client was adverse to reporting. 

CTA is Back Off – Reporting not Mandatory but Voluntary Reporting Continues

Published: January 24, 2025

By Teresa L. Bush, Esq.

The information below is taken directly from the FinCEN BOI website, posted this morning. There is no indication that FinCEN will be moving forward with any enforcement of the CTA at the present time, since they do not mention appealing the order in the Smith case.

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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.

On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland).  As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop.  Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force.  However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

CTA is Back On!

Published: January 23, 2025

By Elizabeth Q. Boehmcke Esq.

The Corporate Transparency Act (“CTA”) is back to being the law of the land for most reporting companies. The United States Supreme Court granted the emergency stay requested by the government in connection with the enforcement of the CTA. The United States District Court for the Eastern District of Texas issued a nationwide injunction against enforcement of the CTA on December 5, 2024 in Texas Top Cop Shop v. Garland. The injunction was appealed to the Fifth Circuit Court of Appeals, which will hear oral argument on the injunction in March. Initially, the Fifth Circuit of Appeals had granted the government’s request for an emergency stay of the nationwide injunction, but reversed itself just a few days later, allowing the nationwide injunction to go into effect. FinCEN had issued extended deadlines for reporting beneficial ownership information reports to January 13, 2025, in most instances, for companies in existence as of December 31, 2023. At this writing, FinCEN has not yet responded to the Supreme Court’s decision so it is unclear whether FinCEN will enforce the January 13, 2025 reporting deadlines for most reporting companies, or will grant a further extension of time to report. Justice Alito granted the stay, in which Justice Gorsuch concurred. Justice Jackson dissented.

Interestingly, the Supreme Court declined, at least for this moment, the invitation of former Solicitor General Elizabeth Prelogar to take up the question of the appropriate use of nationwide injunctions levied by federal district court judges. Justice Gorsuch would have entertained the issue.

While we must wait for FinCEN to respond to the Supreme Court’s decision, its previous decision to extend reporting deadlines deferred by the back and forth of the injunction on enforcement and the various stays suggests that we are likely to see an additional extension of time to file. However, the change in administration could well result in an extension that is intended to wait for the decision of the Fifth Circuit Court of Appeals instead of a mere extra few weeks to make up for the time that the reporting requirements were on hold. Stay tuned and prepare your clients who have held off reporting. It is still possible that a quick report will need to be made.

DOJ Appeals to U.S. Supreme Court – Deadline for Response is Friday – Watch for Quick Decision

Published: January 8, 2025

By Elizabeth Q. Boehmcke Esq.

Time to pay attention again!  Although the nationwide injunction against enforcement of the Corporate Transparency Act is still in effect, the Department of Justice, on behalf of FinCEN, filed an Emergency Motion for Stay Pending Appeal with the United States Supreme Court on December 31, 2024.  Justice Alito of the Supreme Court set a deadline of 4:00 PM Eastern on January 10, 2025 for the plaintiffs in the Texas Top Cop Shop case to file a response to the request by FinCEN to reinstate the emergency stay originally issued by the Fifth Circuit Court of Appeals.  The Supreme Court’s decision on the emergency stay may be released shortly after the response is due.  If the Supreme Court grants the government’s request, assume that FinCEN will continue its push to require compliance with the CTA and that Beneficial Owner Reports could be due as early as January 13, 2025 for most filers.  For those keeping score, that’s Monday.  Given FinCEN’s reaction last time, we might expect guidance from FinCEN granting a few additional days for most filers.  However, even if granted, a new extension of time to file is unlikely to stretch until a decision on the preliminary injunction against enforcement of the CTA is made by the Fifth Circuit Court of Appeals.  Oral arguments on that matter are scheduled for March 25, 2025.  In any event, it’s time to pay attention to what the Supreme Court has to say in this matter if you have clients who may need to file a Beneficial Owner Report and who have been relying on the nationwide injunction to delay filing the report.  It is possible that quick action may be needed.  It is also possible that the Supreme Court will deny the government’s request and the injunction will remain in place at least until the Fifth Circuit makes a decision in March.

FinCEN Alert

Published: December 23, 2024

Alert: Updates to Beneficial Ownership Information Reporting Deadlines – Beneficial Ownership Information Reporting Requirements Now in Effect, with Deadline Extensions

FinCEN is an external website

Attorney News Blog: CTA Injunction Stayed by Fifth Circuit Court of Appeals

Published: December 23, 2024

By Elizabeth Q. Boehmcke Esq.

We have received word that on December 23, 2024, the Fifth Circuit Court of Appeals granted the government’s emergency motion for a stay pending appeal of the preliminary injunction granted by the United States District Court for the Eastern District of Texas. In issuing the stay, the Court apparently ordered that the appeal be heard on an expedited basis at the next available oral argument panel. That would appear to effectively push the argument past the existing January 1 filing deadline. As such, the nationwide preliminary injunction staying enforcement of the CTA should not be relied upon and beneficial ownership reports should be filed in conformity with existing deadlines applicable to the reporting company unless the reporting company has specific judicial relief lifting those requirements for particular plaintiff reporting companies. However, the parties in the case could appeal to the full panel of the Fifth Circuit or to the U.S. Supreme Court over the next few days and more changes could be forthcoming. We will update with more information when we have it.

Attorney News Blog: Texas Top Cop Shop CTA Case Update

Published: December 16, 2024

By Elizabeth Q. Boehmcke Esq.

Matters in Texas Top Cop Shop have accelerated. 

The Department of Justice had filed an emergency motion with the U.S. Court of Appeals for the Fifth Circuit on December 13, 2024, to stay pending appeal the preliminary injunction issued by the U.S. District Court for the Eastern District of Texas, which prevented enforcement of the Corporate Transparency Act.  The government has asked for a ruling by December 27, 2024.  The Fifth Circuit, of its own accord, accelerated the briefing schedule and the final responses are due to the Court by December 19th.  As such, many observers believe it is probable that the Fifth Circuit will issue a ruling before the end of the year.  (There is also an on-going appeal of the preliminary injunction at the District Court.)

The Fifth Circuit could deny the government’s request for a stay of the preliminary injunction, effectively upholding its nationwide impact on the CTA, or it could grant full or partial relief to the government.  If the Fifth Circuit grants a full stay of the preliminary injunction, then the January 1, 2025 filing deadline for reporting companies in existence as of January 1, 2024 will be back in effect nationwide (unless FinCEN extends that deadline).  If the Fifth Circuit grants a partial stay of the preliminary injunction, then the reporting deadline will be back in effect for reporting companies outside the jurisdiction of the Eastern District of Texas (or possibly for all reporting companies except the named plaintiffs).  

Given the upcoming holiday season and the very limited time to file any required beneficial ownership information reports timely, it is important that all attorneys advising clients who may have a reporting obligation under the CTA either to file voluntarily before January 1 or be ready to file before January 1 and pay very close attention to the decisions in this case.  The Fifth Circuit’s decision, which may be issued next week, may offer some temporary guidance.  However, the District Court may also issue an opinion in this matter on the appeal of its own preliminary injunction which could also change the landscape as it exists now.

Attorney News Blog: Corporate Transparency Act Reporting Enjoined and Stay Issued

Published: December 4, 2024

By Elizabeth Q. Boehmcke Esq.

UPDATED: December 9, 2024

Yesterday, December 3, 2024, in Texas Top Cop Shop v. Garland, Judge Amos L. Mazzant of the United States District Court for the Eastern District of Texas issued a preliminary injunction against the Corporate Transparency Act (31 U.S.C. § 5336) (the “CTA”), and the enforcement of the reporting rules under 31 C.F.R. 1010.380 on various grounds, but primarily ruling that the CTA is an unconstitutional overreach by Congress.  In addition, a stay was issued in conjunction with the upcoming compliance deadline.  Practically, this means that the December 31, 2024 deadline for beneficial ownership reporting by companies in existence as of December 31, 2023 has been suspended until further order of the Court.  In addition, newly organized reporting companies need not report beneficial ownership information under the deadlines applicable to such companies.  The Eleventh Circuit is currently considering the constitutionality of the CTA in NSBU v. Yellen, No. 24-10736 (11^th Cir.).  Although the district court in that case also found the CTA to be unconstitutional, its order enjoining enforcement was limited to the particular plaintiffs.  However, the injunction in the Texas Top Cop Shop case is nationwide.  There may be some question of whether the Court in Texas Top Cop Shop exceeded its authority in issuing a nationwide injunction and conservative practitioners outside the Eastern District of Texas may wish to continue with CTA compliance for their clients despite the putative national scope of the injunction.

InterActive Legal has included language relative to the CTA in its documents in anticipation of the need to require beneficial ownership information reporting.  We will not remove this language from our documents until the issue of the constitutionality of the CTA is finally resolved.  While we recognize that a change in administration may result in no desire to defend the CTA, if the Eleventh Circuit finds the law constitutional, there is a chance that the new administration will be forced to defend the law before the Supreme Court which could rule in favor of its constitutionality.  If the Eleventh Circuit, however, finds the CTA to be unconstitutional, there is unlikely to be an appeal.  For now, drafters who feel that the language is unnecessary should manually edit the documents to remove it after assembly. 

Webinar Sponsored by InterActive Legal, Peak Trust Company, and Shenkman Law

“Corporate Transparency Act: Trusts and Related Considerations”

by Jonathan G. Blattmachr Esq., Alan S. Gassman Esq., 
Chriseanna Mitchell and Martin M. Shenkman Esq.

Originally Aired on 11/21/2024

The Corporate Transparency Act (CTA) filing deadline for the CTA is end of year 2024 and there is limited time to address filings. This program will explore many of the implications, issues and open questions about how trust ownership of entities may affect CTA filings.

FinCen Beneficial Ownership Information News

On July 24, 2024, FinCEN updated its Beneficial Ownership Information Frequently Asked Questions page to include a new question (F.13) concerning the appropriate tax identification number to report to FinCEN on its beneficial ownership information report if a reporting company is a disregarded entity.  It should be noted that if a disregarded entity does not have its own EIN, it will not need to obtain one to meet its reporting obligations to FinCEN so long as it can report another type of taxpayer identification number as provided.  The link to FinCEN’s Frequently Asked Questions is here. 

New – FinCEN Response to National Small Business United Case

On March 4, 2024, FInCEN announced its response to the declaration by the Northern Alabama District Court that the Corporate Transparency Act is unconstitutional and declared that it would be suspending enforcement of beneficial ownership reporting deadlines against the plaintiffs in the case.  There was no mention of delaying the deadline as to any other person who may be required to report under the Act. Read the announcement here.

As widely expected, the Justice Department filed an appeal of the case on March 11, 2024.  Read the very brief appeal here.

New Development Regarding the Corporate Transparency Act
(3/1/2024)

In National Small Business United v. Yellen, No. 5:22-cv-01448-LCB (N.D. Ala. Mar 1, 2024), the Northern District Court of Alabama ruled that the Act is unconstitutional on the grounds that it exceeded Congress’ legislative powers.  The Court also specifically enjoined the government from enforcing the Corporate Transparency Act against the Plaintiffs in the case, though there is no mention of whether the government can otherwise enforce the Act against others.  With the initial 90-day filing deadline for newly formed reporting companies approaching at the end of March, it seems probable that the government will appeal the ruling and either request a stay of the injunction or voluntarily announce a further delay in the reporting deadlines to prevent inconsistent enforcement issues.  A link to the memorandum opinion is available below.

Attorney News Blog:
Getting Ready for the Corporate Transparency Act: Prepare Now

By Elizabeth Q. Boehmcke Esq.

Will you and your firm be ready to deal with the challenges posed by the CTA and reap the rewards of increased confidence and trust of your clients? If you are like many attorneys, you are aware of the CTA and its requirements but do not yet feel fully prepared to grapple with it in practice. The exact approach you take in dealing with the CTA may vary depending on the size of your firm, your client base, and your capacity to take on additional work. This task list is suggested as a starting point to help you become better prepared.

New Development:  
HR 5119 passed December 12, 2023; Awaiting Senate action

The U.S. House of Representatives passed HR 5119, the Protect Small Business and Prevent Illicit Financial Activity Act, by an overwhelming vote of 420-1 on December 12, 2023.  If taken up in the Senate and passed as is, the bill would make certain important changes to the current reporting deadlines:

• For businesses existing before January 1, 2024, the deadline for making an initial report would be extended to January 1, 2026;
• For businesses created on or after January 1, 2024, the deadline for making an initial report would be extended to 90 days from formation.  This 90-day deadline would also apply to businesses created on or after January 1, 2025.  (An announcement from FinCEN on November 29, 2023 extended the deadline for companies created in 2024 to 90 days but had left the original 30-day deadline in place for companies created after 2024.)
• The deadline for updated reports and changes would be extended to 90 days from the date of the change, instead of 30 days.

In addition, the bill contains a provision that, while somewhat unclear, may be aimed at preventing FinCEN from acting to allow reports “relating to the inability of the reporting company to obtain or identify information in the alternative to filing a report required under this subsection.”  This proposed new section 31 USC 5336(b)(1)(H) may prevent FinCEN from providing any relief to reporting companies who in good faith attempt to obtain the required information from beneficial owners.  Additional clarity as to the government’s intent would be welcome; however, for attorneys advising clients about the Corporate Transparency Act, careful consideration may be required to determine how the company will force compliance with its reporting requirements amongst its members, partners and associates if there will be no relief available to a reporting company that attempts but is unsuccessful at gathering information regarding beneficial owners.  You can read the bill here.

Webinar Sponsored by InterActive Legal, Peak Trust Company, and Shenkman Law

“Corporate Transparency Act: Deeper Dive”

by Jonathan G. Blattmachr Esq., Abigail E. O’Connor Esq., Chris Lauer Esq. and Martin M. Shenkman Esq.

Originally Aired on 12/18/2023

This program will delve deeper into dealing with the CTA and not just summarize the new rules. The focus will be on discussions of the panelists to present different points of view and different ideas.

Webinar Sponsored by InterActive Legal and Shenkman Law

“Are you prepared for the Corporate Transparency Act?”

by Jonathan G. Blattmachr Esq. Abigail E. O’Connor Esq. and Martin M. Shenkman Esq.

Originally Aired on 11/20/2023

This webinar reviews the highlights, requirements, and framework to understand and address the Corporate Transparency Act (“CTA”), but it will go much deeper than just summarizing the new rules. This program will provide practical step-by-step strategies for communicating with clients about the CTA.

Forbes Article

​​​​​​”​Act Before Year End: Corporate Transparency Act Is Coming!”

by Martin M. Shenkman Esq.

Published 11/14/2023 

InterActive Legal Advisor and webinar presenter, Martin Shenkman, has written this article for Forbes, highlighting the urgency and importance of estate planners understanding this soon-to-be-effective federal law.

This is an external site

InterActive Legal Subscriber Sample 2023 Year End Planning Letter

by InterActive Legal Attorneys

Published 11/27/2023

This is a sample letter that can be adapted and sent to clients that discusses both the Corporate Transparency Act and the imminent sunset of the increased estate and gift tax exemption and what steps clients need to take. 

Update November 29, 2023:  Today FinCEN announced an amendment to the final rules for beneficial ownership reporting with respect to reporting companies created from January 1, 2024 through December 31, 2024.  For reporting companies created during this timeframe, the reporting deadline for initial reports is extended from 30 days to 90 days from the formation of the company.  However, for reporting companies formed on or after January 1, 2025, the deadline for filing initial reports goes back to 30 days from formation of the reporting company.  Note that FinCEN did not change the 30 day deadline for reporting changes, which would be effective for reporting companies formed in 2024 and thereafter.  InterActive Legal has updated the Sample Client letter to reflect this amendment to the final rules.  You can read the announcement from FinCEN here.

Resources from InterActive Legal and LawEasy

by Jonathan G. Blattmachr Esq. and Martin M. Shenkman Esq.