
Recent Developments on the Corporate Transparency Act
In a recent development, the Fifth Circuit Court of Appeals had upheld a lower court’s decision to pause the enforcement of the Corporate Transparency Act (CTA).
This ruling effectively delayed the filing requirements for various businesses, which includes both new companies and well-established firms.
However, the situation took a significant turn yesterday when the United States Supreme Court stepped in, overturning the Fifth Circuit’s decision and allowing the CTA and its filing mandates to move forward.
Current Reporting Obligations
Despite this ruling from the highest court, the Treasury Department has provided some clarity.
According to their guidance, companies that need to report beneficial ownership information are currently not required to submit Beneficial Ownership Information Reports (BOIRs) to the Financial Crimes Enforcement Network (FinCEN).
This is due to ongoing litigation that still impacts the CTA’s enforcement, which the Supreme Court has not resolved.
- At this moment, reporting companies are not obligated to file BOIRs and face no penalties for any failures to do so.
- FinCEN welcomes voluntary submissions from entities that choose to get ahead of the curve in anticipation of future requirements.
- Companies that have already started gathering beneficial ownership information might want to complete this process to be ready if FinCEN decides to reactivate the enforcement of the CTA.
Navigating the Legal Landscape
We hope this information helps navigate the shifting legal landscape surrounding the CTA.
Source: Natlawreview.com