FinCEN Resumes Enforcement of BOI Reporting Requirements: Urgent Action Required of Millions of Businesses

In the latest turn of events, the CTA survives its most significant legal challenge to date. Per the latest ruling, the Corporate Transparency Act (CTA) is enforceable, and new deadlines have been introduced to accommodate the period during which enforcement was paused.

On December 23, 2024, the Fifth Circuit Court ruled in the matter of Texas Top Cop Shop, Inc., et al. v. Garland, et al. The Court granted the Department of Justice’s motion for a stay pending appeal of the recent Texas district court order that preliminarily enjoined enforcement of the Corporate Transparency Act.

What does this mean?

The CTA is back in action, and while the reporting requirements for Beneficial Ownership Information Reports (BOIR) are enforceable again, the Department of the Treasury has provided updated filing deadlines to give businesses additional time to report.

This is important news for businesses and organizations across the country. If your company is required to file BOIR under the CTA, time is of the essence to complete your BOI filing. For most, the reporting deadline is only a few short weeks away, and being prepared will help ensure you meet the requirements on time.

Updated BOIR Filing Deadlines

1. Entities Formed Before January 1, 2024: These entities now have until January 13, 2025, to file their initial BOIR reports. This extension offers extra time beyond the original January 1, 2025 deadline.
2. Entities Formed Between September 4 and December 23, 2024: Businesses with original filing deadlines falling between December 3 and December 23, 2024, now have until January 13, 2025, to file their reports.
3. Entities Formed Between December 3 and December 23, 2024: These entities have 21 extra days beyond their original filing deadline to submit their BOIR reports.
4. Entities Qualifying for Disaster Relief: Companies eligible for disaster relief may have extended deadlines beyond January 13, 2025, and should comply with the later applicable date.

BOIR Filing Deadlines and the Risks of Delayed Reporting

According to the most recent reports, less than 30% of the 32.6 million entities impacted by the CTA have submitted their BOIR reports.

FinCEN has outlined strict penalties for failing to file BOIR reports or providing false information. Civil penalties can reach up to $591 per day of continued violation, while criminal penalties include fines of over $11,000 and/or imprisonment for up to two years.

These deadlines are critical, and businesses must ensure timely BOI filing to avoid penalties. For more information, see our Beneficial Ownership Information Reporting Guide.

Exemptions

Confusion about exemption eligibility is one of the primary reasons many business owners have delayed filing their BOIR reports. Some hoped their business might qualify for an exemption, reasoning that entities with minimal revenues, no employees, or limited activity wouldn’t need to report. Unfortunately, this is a common misconception.

To qualify for the only broadly applicable exemption, known as the ‘large operating company’ exemption, a business must meet all of the following criteria:

• Report gross receipts or sales exceeding $5 million on the previous year’s tax return
• Have a U.S. operating presence
• Employ 20+ full-time employees

While other exemptions exist, they are extremely narrow. For example, inactive entities, federally tax-exempt nonprofits, banks, and public utilities are exempt from BOI filing.

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• Guided Information Collection: Our secure system walks you through gathering the necessary details for your BOIR.
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With Harbor Compliance, you’ll never have to worry about starting from scratch or losing track of past filings. Have questions before you order? Contact us!