Impact of Ongoing Litigation

Deadline Stay – Voluntary Submission Only

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. While this litigation is ongoing, FinCEN will comply with the order issued by the U.S. District Court for the Eastern District of Texas for as long as it remains in effect.

On Tuesday, December 3, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), a federal district court in the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction that:

(1) enjoins the CTA, including enforcement of that statute and regulations implementing its beneficial ownership information reporting requirements, and, specifically

(2) stays all deadlines to comply with the CTA’s reporting requirements. The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024.

Several district courts have denied requests to enjoin the CTA, ruling in favor of the Department of the Treasury. The government continues to believe—consistent with the conclusions of the U.S. District Courts for the Eastern District of Virginia and the District of Oregon—that the CTA is constitutional.

For more information https://fincen.gov/boi

PPL CPA will not be responsible for advising you regarding the legal or regulatory aspects of your company’s compliance with the CTA, nor are we responsible for the preparation or submission of beneficial ownership information reports to FinCEN.

Heads Up: If the preliminary injunction is stayed or overturned, it is uncertain how much, if any, additional time reporting companies will be provided to submit BOI reports that would have been due in the absence of the injunction. Therefore, reporting companies that have not yet filed their initial BOI reports, and those that have changes to report since their initial filing, should continue the process of gathering relevant information for their BOI reports, and be ready to file on short notice.